Applicability of section 44AD for Railway Ticket Booking agent

Applicability of section 44AD for Railway Ticket Commission Agent upheld when in addition to booking he has to arrange conveyance to passengers and luggage

ABCAUS Case Law Citation:
ABCAUS 2754 (2019) (01) ITAT

The assessee had challenged the order of the Commissioner of Income Tax (Appeals) on the issue of applicability of the provisions of section 44AD of the Income Tax Act, 1961 ( the Act ) to the assessee.

The Assessing Officer as well as the CIT(A) was of the opinion that, as per provision of section 44AD(6)(ii), the section could not be applied to commission agents and that the assessee derived income from commission on sale of railway tickets.

The assessee’s case was that he was not a mere commission agent as per the Agreement with the NEF Railway and that in addition to selling of tickets was required to undertake other jobs like arranging transport to passengers and luggage between the Railway Stations.

The Tribunal noted that the assessee apart from booking of railway tickets, the agreement required that the assessee, as out agent, in addition had to arrange conveyance to passengers and luggage.

The Tribunal also observe that railways had deducted TDS u/s 194C only. Hence, the assessee was not a mere commission agent and hence not hit by section 44AD(6)(ii) of the Act.

Accordingly, the Assessing Officer was directed to assess the income from this Contract earned by the assessee by applying the provision of section 44AD.

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