The Assessing Officer proposed to assess the collection charges received by the assessee from the Authority as business income chargeable to tax under article 7 of the DTAA. DRP approved the order of Assessing Officer. On appeal the Tribunal held that as the effective management of the assessee was situated in Germany the profits from operation of aircraft in international traffic were taxable only in Germany. However, the user development fee was levied at Indian airports as a measure to increase revenues of the airport operator. The user development fee was levied to bridge any revenue shortfall so that the airport operator was able to get a fair rate of return on investment. The collection charges paid by the Authority to the assessee whether called discount or commission was nothing but service charges paid for assessee collecting user development fee and passing it on to the Authority. The collection charges paid by the Authority to the assessee could not be said to be the income derived from operation of aircraft falling under article 8 of the DTAA between India and Germany. (AY.2014-15)