ADVISE Mayank Saxena about whether tax has to be deducted for payment of PSF to airport operators in Mumbai and Delhi?

(a) Section 194-I requires deduction of tax at source at specified percentage on any income payable to a resident by way of rent. Explanation to this section defines the term “rent” as any payment, by whatever name called, under any lease, sub- lease, tenancy or any other agreement or arrangement for the use of any (a) land; or (b) building; or (c) land appurtenant to a building; or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fitting, whether or not any or all of them are owned by the payee. On the issue of whether payment of PSF by an airline to an Airport Operator qualifies as rent to attract TDS under section 194-I, the Bombay High Court relied on the Apex Court ruling in Japan Airlines and Singapore Airlines case, wherein it was observed that the primary requirement for any payment to qualify as rent is that the payment must be for the use of land and building and mere incidental/minor/insignificant use of the same while providing other facilities and service would not make it a payment for use of land and buildings so as to attract section 194-I. Accordingly, the Bombay High Court declined to admit the ground relating to the applicability of the provisions of section 194-I on PSF charges holding that no substantial question of law arises. The provisions of section 194-I shall not be applicable. Therefore, Mayank Saxena need not deduct TDS on the PSF payments made to airport operators at Delhi and Mumbai.