ITO (TDS) 3(3), MUMBAI V. STARLIGHT SYSTEMS P. LTD, MUMBAI

ITA 1794/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71256 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 18-09-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: RAKESH JOSHI
• Keywords: Maximum Marginal Rate
• Section: 201(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , , BEFORE SHRI RAJENDRA SINGH , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER . / ITA NO. 1794 / MUM ./ 2012 ( / ASSESSMENT YEAR : 200 9 10 ) INCOME TAX OFFICER (TDS) WARD 3( 3 ), SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W) MUMBAI 400 002 .. / APPELLANT V/S STARLIGHT SYSTEMS PVT. LTD. C 21, HOUSEFIN BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400 051 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAFCS7733L / REVENUE BY : MR. GIRI JA DAYAL / ASSESSEE BY : MR. RAKESH JOSHI / DATE OF HEARING 18.09.2013 / DATE OF ORDER 27.09.2013 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEA L HAS BEEN PREFERRED BY THE REVENUE, CHALLENGING THE IMPUGNED ORDER DATED 25 TH DECEMBER 2011, PASSED BY THE LEARNED STARLIGHT SYSTEMS PVT. LTD. 2 COMMISSIONER (APPEALS), MUMBAI, IN RELATION TO ORDER UNDER SECTION 201(1) / 201(1A) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) FOR TH E ASSESSMENT YEAR 2009 10. 2. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL PREFERRED BY THE REVENUE , IS IN RESPECT OF NON DEDUCTION OF TDS AND LEVY OF INTEREST UNDER SECTION 201(1) / 201(1A) , ON THE GROUND THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISI ONS OF SECTION 194 I. TO CHALLENGE THIS ISSUE, THE REVENUE HAS TAKEN AS MANY AS 13 GROUNDS WITH VARIOUS SUB GROUNDS, WHICH ARE ARGUMENTATIVE IN NATURE AND ARE NOT IN ACCORDANCE WITH THE PRESCRIBED RULES GIVEN IN INCOME TAX APPELLATE TRIBUNAL RULES, 1962. H OWEVER, WE ARE DISPOSING OFF THIS APPEAL SOLELY BASED ON THE ISSUES INVOLVED AND CHALLENGED BY THE REVENUE. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IS SQUARELY COVERED BY A SERIES OF DECISIONS OF THE TRIBUNAL , MUMBAI BENCH, WHEREIN, IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE , HOLDING THAT THE LEASE PREMIUM PAID TO MMRDA DOES NOT FALL WITHIN THE AMBIT OF RENT UNDER SECTION 194 I AND, HENCE, NO TDS IS REQUIRED TO BE DEDUCTED. 4. BRIEF FACTS, AS CUL LED OUT FROM THE IMPUGNED ORDER, ARE THAT THE ASSESSEE HAS MADE PAYMENT TO MMRDA FOR SUMS AMOUNTING TO ` 18.42 CRORES IN THE FINANCIAL YEAR 2008 09 TOWARDS PREMIUM ON ACCOUNT OF ADDITIONAL FSI IN RESPECT OF TWO PLOTS OF LAND IN THE BANDRA KURLA COMPLEX. TH ESE PLOTS WERE ALLOTTED TO THE ASSESSEE THROUGH LEASE DEED EXECUTED BY THE MMRDA IN FAVOUR OF THE ASSESSEE ON 27 TH JULY 2006, AGAINST THE PAYMENT OF LEASE PREMIUM OF ` 136.91 CRORES. THE ASSESSING OFFICER WAS OF THE OPINION THAT SUCH A PAYMENT IS IN THE NA TURE OF RENT AND TDS SHOULD HAVE BEEN DEDUCTED UNDER SECTION 194 I . THUS, I N RESPECT OF THE SAID PAYMENT OF STARLIGHT SYSTEMS PVT. LTD. 3 ` 18.42 CRORES TOWARDS PREMIUM ON ACCOUNT OF ADDITION FSI. ACCORDINGLY, HE LEVIED INTEREST UNDER SECTION 201(1) / 201(1A). 5. BEFORE THE LEARNED COMMI SSIONER (APPEALS), DETAIL SUBMISSIONS WERE MADE WHICH HAVE BEEN INCORPORATED FROM PAGE 4 TO 47 OF THE APPELLATE ORDER. THE LEARNED COMMISSIONER (APPEALS), AFTER DULY APPRECIATING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED AND HELD AS UNDER: 5.10 IN THE PR ESENT CASE, THE WRITTEN SUBMISSION FURNISHED BY THE APPELLANT AND THE ORDER PASSED BY THE AO HAS BEEN CONSIDERED BY ME. IT IS SEEN THAT THE FACTS IN THE CASE OF THE APPELLANT ARE SIMILAR TO THE FACTS IN THE CASE OF SHREE NAMAN DEVELOPERS LTD. AND OTHER CAS ES CITED IN PARA 4 .6 ABOVE. HENCE, IT IS EVIDENT THAT THE PREMIUM PAID BY THE APPELLANT FOR ACQUIRING ADDITIONAL FSI IN RESPECT OF THE LEASED PLOTS IS NOT IN THE NATURE OF RENT AS CONTEMPLATED U/S 194 I OF THE ACT. IT IS THUS ALSO EVIDENT THAT THE APPELLAN T WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S 1 94 - I OF THE INCOME - TAX ACT, 1961. I HOLD ACCORDINGLY. THE DEMAND OF RS. 5 , 16 , 05 , 075 / - (RS . 4,16,996 + RS.99,88,079) R AISED BY THE AO BY INVOKING PROVISIONS OF SECTION 201(1)/2011A) IS DELETED. 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT POINT IN ISSUE IS SQUARELY COVERED BY THE FOLLOWING DECISIONS: (I) SHREE NAMAN HOTELS PVT. & SHREE NAMAN DEVELOPERS LTD ., ORDER DATED 1 4.8.2013, ITA NO. 688 TO 691/MUM/2012 . (II) M/S WADHWA & ASSOCIATES REALTORS PVT. LTD . ORDER DATED 3 . 7 . 2013 , ITA NO. 695/MUM/2012 7. AFTER CAREFULLY CONSIDERING THE RIVAL SUBMISSIONS AND THE RELEVANT FINDINGS OF THE LEA RNED COMMISSIONER (APPEALS), WE FIND THAT THIS ISSUE IS COVERED BY A SERIES OF DECISIONS OF THE TRIBUNAL, MUMBAI BENCH. MOREOVER, WE HAVE ALSO DECIDED IDENTICAL ISSUE AGAINST THE REVENUE FOLLOWING THE AFORESAID DECISIONS , AS RELIED UPON BY THE LEARNED COUN SEL IN AN APPEAL FILED BY THE REVENUE IN TRENT LIMITED, ITA NO.1730/MUM./2012, VIDE ORDER OF EVEN DATE. CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL, WE HOLD THAT SUCH STARLIGHT SYSTEMS PVT. LTD. 4 PAYMENT OF PREMIUM ON ACCOUNT OF ADDITIONAL FSI CANNOT BE TREATED AS RENT AS STIPULATE D UNDER SECTION 194 I AND, HENCE, NO TDS WAS REQUIRED TO BE DEDUCTED. CONSEQUENTLY, INTEREST UNDER SECTION 201(1) / 201(1A) CANNOT BE LEVIED. 8. 8 . IN THE RESULT, REVENUES APPEAL IS TREATED AS DISMISSED. 27 TH SEPTEMBER 2013 ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER 2013 SD / - RAJENDRA SINGH ACCOUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 27 TH SEPTEMBER 2013 / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE ; (2) / THE REVENUE; (3) ( ) / THE CIT(A ) ; (4) / THE CIT, MUMBAI CITY CONCERNED ; (5) , , / THE DR, ITAT, MUMBAI ; (6) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI