No TDS liability on supplement rental paid as it is not connected to operation of leased aircraft, not covered in exclusion of sec. 10(15A)

Brief of the Case

Delhi High Court held In the case of Jet Lite (India) Ltd. vs. CIT that the ITAT has rightly pointed out that the supplement rental was within the ambit of the original provision of Section 10(15A). Post amendment w.e.f. 1st April 1996, if any payment had to be brought within the exclusionary portion of Section 10(15A), then it must be shown (i) that the lessor either had supplied the spares or provided any facility or service in connection with operation of the leased aircraft; and (ii) the payment has been made by the lessee in consideration of such spares/facilities/services.

In the given case, revenue was unable to point out any clause in the agreement that required the lessor to provide facilities or services in connection with the leased aircraft. Therefore, the supplemental rent did not fall within the ambit of the exclusionary provisions of Section 10 (15A). Consequently, there was no obligation on the Assessee to deduct the tax at source under Section 195.

On the matter of unexplained cash credit, it was held that the Assessee has to prima facie prove (1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the creditor/subscriber. In the given case, the onus on the Assessee of providing some prima facie material to establish the identity, genuineness and creditworthiness of the said 65,185 persons was not discharged by the Assessee. Accordingly, addition confirmed on the assessee.

Facts of the Case

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