Discounts received on buying aircraft to come under tax net


The Commissioner of Income Tax (Appeals), a quasi-judicial appellate authority, has asked the Central Board of Direct Taxes to look at treating discounts received by Indian airlines on purchase of aircraft as commission while computing their taxable income, a move that could further hurt an industry that has just started to come out of troubled times.

Based on this view, the CIT has issued notices to InterGlobe Aviation, asking the operator of Indigo Airlines why its taxable income should not be increased by more than Rs 400 crore for the assessment years 2008-11 to include the discounts it received, reports The Economic Times.

InterGlobe had presented these discounts as capital receipts, which are exempted from income tax, but the commissioner rejected the plea and served the notices of enhancement.


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