DCIT Vs Spicejet Limited (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi has dismissed two appeals filed by the income tax department against Spicejet Limited, upholding the Commissioner of Income Tax (Appeals)’s decision to delete significant disallowances related to supplementary aircraft rent and maintenance reserves for Assessment Years 2020-21 and 2021-22.
The revenue department had challenged the deletion of additions, arguing that supplementary rent and maintenance reserve constituted royalty and were disallowable under Section 40(a)(i) of the Income Tax Act, 1961, due to alleged non-deduction of tax at source. The amounts in dispute were substantial, including Rs. 1,16,32,302/- for maintenance reserve and Rs. 11,66,32,06,064/- for supplementary rent in AY 2020-21, and Rs. 643,80,46,168/- for supplementary rent in AY 2021-22.
Spicejet’s legal counsel contended that the issues raised by the revenue had been consistently decided in the airline’s favor by various ITAT Delhi benches for preceding assessment years, from AY 2006-07 to AY 2018-19. They emphasized that the facts and circumstances of the current assessment years remained unchanged, making the previous rulings directly applicable.
Judicial Precedents Guide Decision
The ITAT acknowledged that the facts in the appeals under consideration were identical to those of previous years. The Tribunal relied heavily on its own coordinate bench’s decisions in Spicejet’s own case, which had, in turn, followed a crucial judgment by the Special Bench of ITAT, Delhi, in the case of Interglobe Aviation Ltd. Vs. ACIT [191 ITD 1].
