Law:

Section:

Section 194H of the Income-tax Act, 1961 - Deduction of tax at source - Commission or brokerage, etc. - Assessment year 2001-02 - Assessee(s)-airlines had executed Passenger Sales Agency (PSA) agreements with travel agents in terms of which they would supply blank tickets to travel agents and would pay standard commission to them on published fare of tickets sold by them - Travel agents were required to pay net fare to assessees, even though they would obtain amount over and above net fare - Assessees deducted tax at source on amount of standard commission, but did not make deduction on supplementary commission, i.e., amount received by travel agents over and above net fare, on ground that it was in nature of discount and would not fall within ambit of section 194H - Whether fact, that supplementary commission was a payment which travel agents received from passengers by virtue of sale of air tickets of which assessees were proprietors at a point till transaction was made, would clearly establish that it was a 'commission' within meaning of section 194H as against discount as claimed by assessee-airlines - Held, yes - Whether therefore, assessee(s)-airlines were obliged to deduct tax at source on supplementary commission also - Held, yes Section 194H of the Income-tax Act, 1961 - Deduction of tax at source - Commission or brokerage, etc. - Whether where assessee-airlines issued tickets to its travel agents at a concessional price, transaction between assessee and travel agents was that of principal-to-principal and difference in price was discount - Held, yes - Whether, therefore, such transaction would not fall with ambit of section 194H - Held, yes FACTS The assessee(s)-airline(s) had executed Passenger Sales Agency (PSA) agreements with travel agents in terms of which they would supply blank tickets to travel agents and would pay standard commission to them on published fare of tickets sold by them. The travel agents were required to pay net fare to assessees, even though they would obtain amount over and above net fare. The assessees deducted tax at source on amount of standard commission, but did not make deduction on supplementary commission,i.e., amount…

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