ITO (TDS) LTU, MUMBAI V. IDBI BANK LTD, MUMBAI

ITA 2056/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101062 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 26-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Maximum Marginal Rate
• Section: 201(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2056/MUM/2014 ASSESSMENT YEAR: 2011-12 ITO(TDS) LTU, 29 TH FLOOR, W.T.C.1, CUFFE PARADE, MUMBAI-400005 / VS. IDBI TOWER, WORLD TRADE CENTRE, CUFFE PARADE, MUMBAI-400005 ( / REVENUE) ( !'#$ % /ASSESSEE) P.A. NO. AABCI8842G / REVENUE BY SHRI M.M.CHATE-DR !'#$ % / ASSESSEE BY SHRI SATISH R. MODY ! & % ' / DATE OF HEARING : 16/09/2015 & % ' / DATE OF ORDER: 29/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 02/01/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO DELET ING THE ADDITION MADE U/S 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) FOR NOT DEDUCTING THE TD S U/S 194I IDBI BANK LTD. ITA NO.2056/MUM/2014 2 ON THE AMOUNT OF RS.16,44,20,125/- PAID BY THE ASSE SSEE TO MMRDA WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. AT THE OUTSET, DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE , SHRI SATISH R MODY, CONTENDED THAT THE I MPUGNED ISSUE IS COVERED IN THE CASE OF ASSESSEE ITSELF BY THE ORDER OF THE TRIBUNAL VIDE ORDER DATED 24/11/2014 (ITA NO.4737/MUM/2013) (ASSESSMENT YEAR 2008-09) AND ITA NO.7515/MUM/2013 (ASSESSMENT YEAR 20010-11) ORDER DATED 17/06/2015. THE LD. COUNSEL FURNISHED THE PHO TOCOPY OF BOTH THE ORDERS. ON THE OTHER HAND, THE LD. DR, SHRI M.M. CHATE, DID NOT CONTROVERT THE CLAIM OF THE ASSESSEE . 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE AFORESAID O RDER OF THE TRIBUNAL DATED 17/06/2015 FOR A.Y. 2010-11 FOR READY REFERENCE:- THIS IS AN APPEAL FILED AT THE INSTANCE OF THE REV ENUE AND IT PERTAINS TO A.Y. 2010-11. 2. FOLLOWING GROUNDS WERE URGED BEFORE US: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S. 201(1) & 201(1A) OF THE ACT FOR NOT DEDUCTING THE TDS U/S. 1 94I ON THE AMOUNT OF RS.6,36,67,500/- PAID BY ASSESSEE TO MMRD A WITHOUT APPRECIATING THE FACTS OF THE CASE. IDBI BANK LTD. ITA NO.2056/MUM/2014 3 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER RESTORED. 3. FACTS OF THE CASE IN SHORT ARE THAT THE ASSESSEE BANK PAID A SUM OF RS.6,36,67,500/- AS LEASE PREMIUM FOR ACQUIR ING ADDITIONAL BUILT UP AREA FOR CONSTRUCTING COMMERCIA L BUILDING ON A PLOT OF LAND AVAILABLE AT BANDRA KURLA COMPLEX , WHICH IN TURN WAS TAKEN ON LEASE FROM MMRDA. ASSESSEE DID NO T DEDUCT TAX AT SOURCE IN RESPECT OF THIS PAYMENT. 4. ACCORDING TO THE AO THE AMOUNT PAID BY THE ASSES SEE CONSTITUTES RENT WITHIN THE MEANING OF SECTION 19 4-I OF THE ACT; SINCE THE ASSESSEE HAS NOT DEDUCTED TAX AT SOU RCE, IT COMMITTED DEFAULT IN TERMS OF SECTIONS 201(1) AND S ECTION 201(1A) OF THE ACT. ACCORDINGLY HE CALCULATED THE T AX AND INTEREST PAYABLE UNDER SECTIONS 201(1) AND 201(1A) RESPECTIVELY. 5. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE LEASE PREMIUM PAID FOR SANCTIONING OF ADDITIONAL BU ILT UP AREA CANNOT BE EQUATED TO PAYMENT OF RENT; EVEN THOUGH I T IS TERMED AS LEASE PREMIUM IT WAS A CAPITAL PAYMENT FOR THE P URPOSE OF ACQUIRING LONG TERM LEASE HOLD RIGHTS IN THE LAND A ND HENCE FALLS OUTSIDE THE KEN OF SECTION 194-I OF THE ACT. 6. THE LEARNED CIT(A) OBSERVED THAT THE PREMIUM IS PAID FOR OBTAINING LEASE AND HENCE IT CANNOT BE EQUATED WITH RENT, WHICH IS PAID PERIODICALLY. HE HAS ALSO VERIFIED TH E RECORDS TO NOTICE THAT IT WAS PAYMENT FOR GRANTING ADDITIONAL FSI. ASSESSEE HAS MADE PAYMENT TO MMRDA FOR ACQUIRING IDBI BANK LTD. ITA NO.2056/MUM/2014 4 LEASEHOLD LAND AND ADDITIONAL BUILT UP AREA. HAVING REGARD TO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF KHIMLINE PUMPS LTD. 258 ITR 459 AS WELL AS THE DECI SION OF THE ITAT IN THE CASE OF WADHWA AND ASSOCIATION REAL TORS (P) LTD. THE DEMAND RAISED BY THE AO WAS SET ASIDE BY T HE CIT(A). 7. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. AT TH E TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THIS ISSUE HAS COME UP BEFORE ITAT I BENCH, MUMBA I IN ASSESSEES OWN CASE FOR A.Y. 2008-09 (ITA NO. 4737/MUM/2013 DATED 24.11.2014) WHEREIN THE BENCH FOLLOWED THE DECISION OF ITS EARLIER ORDER IN THE C ASE OF M/S. WADHAWA AND ASSOCIATES REALTORS PVT. LTD. TO HOLD T HAT PROVISIONS OF SECTION 194-I CANNOT BE INVOKED IN TH E FACTS OF THE CASE, IN WHICH EVENT ASSESSEE CANNOT BE SAID TO BE IN DEFAULT UNDER SECTIONS 201(1) AND 201(1A). 8. THE LEARNED D.R. COULD NOT PLACE ANY CONTRARY JU DGEMENT ON THIS ASPECT AND HE HAS NOT DISPUTED THE FACTUAL MATRIX OF THE CASE ALSO. 9. HAVING HEARD THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT(A) DOES NOT CALL FOR AN Y INTERFERENCE, SINCE ON IDENTICAL ISSUE THE ITAT I BENCH, MUMBAI IN ASSESSEES OWN CASE HELD THAT THE LEASE P REMIUM PAID BY THE ASSESSEE TO MMRDA WAS NOT IN THE NATURE OF RENT ASCONTEMPLATED IN SECTION 194-I OF THE ACT AND CONS EQUENTLY THE ASSESSEE CANNOT BE SAID TO BE IN DEFAULT IN TER MS OF SECTIONS 201(1) AND 201(1A) OF THE ACT. WE, THEREFORE, UPHOL D THE ORDER PASSED BY THE CIT(A). IDBI BANK LTD. ITA NO.2056/MUM/2014 5 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 2.3. ON CONSIDERATION OF FACTS AND THE RIVAL SUBMI SSIONS FROM BOTH SIDES, WE NOTE THAT ON IDENTICAL ISSUE, T HE BENCH VIDE AFORESAID ORDER DATED 17/06/2015 DULY CONSIDER ED THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KHIMLINE PUMPS LTD. 258 ITR 459, DECISION IN THE CA SE OF WADHWA AND ASSOCIATE REALTORS PVT. LTD. ALONG WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE IT SELF FOR A. Y. 2008-09 HELD THAT THE ASSESSEE CANNOT BE SAID TO BE IN DEFAULT U/S 201(1) AND 201(1A) OF THE ACT. IN THE ABSENCE OF CONTRARY FACTS AND FOLLOWING THE AFORESAID DECISIONS, WE FIN D NO MERIT IN THE APPEAL OF THE REVENUE, THEREFORE, THE STAND OF THE LD. FIRST APPELLATE AUTHORITY IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 16/09/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; ) ! DATED : 29/09/2015 F{X~{T? P.S/. !.. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1% ( +, ) / THE CIT, MUMBAI. 4. 1% / CIT(A)- , MUMBAI IDBI BANK LTD. ITA NO.2056/MUM/2014 6 5. 3 4 /%!' , +,' +' 5 , / DR, ITAT, MUMBAI 6. 6# 7 / GUARD FILE. / BY ORDER, 03,% /% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI