ITO (TDS) 2(3), MUMBAI V. MILENIUM ASSOCIATES, NAVI MUMBAI

ITA 3172/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2856 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Maximum Marginal Rate; Capital receipt; Capital expenditure
• Section: 133A; 201(1); 10

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3172/MUM/2014 ASSESSMENT YEAR: 2010-11 ITO(TDS)-2(3), R. NO.708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI-400002 / VS. M/S MILLENIUM ASSOCIATES, PLOT NO.11, AVANISH SECTOR-10, AIROLI, NAVI MUMBAI-401708 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AAPFM3953K ITA NO.3173/MUM/2014 ASSESSMENT YEAR: 2010-11 ITO(TDS)-2(3), R. NO.708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI-400002 / VS. M/S MILLENIUM CORPORATION, PS 41, PLOT NO.B/27, CRYSTAL PLAZA, SECTOR-7, KHARGHAR, NAVI MUMBAI-401210 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO.AAFRM9302L / REVENUE BY SHRI VIJAY KUMAR SONI !'# $ / ASSESSEE BY NONE % & $ ' / DATE OF HEARING : 28/10/2015 & $ ' / DATE OF ORDER: 06/11/2015 M/S MILLENIUM ASSOCIATES & M/S MILLENIUM CORPORATION ITA NOS. 3172 & 3173/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS, ARE BY THE REVENUE WITH RESPEC T TO DIFFERENT ASSESSEES, HAVING COMMON ISSUES, WHEREIN, THE IMPUGNED ORDER DATED 21/02/2013 OF THE LD. FIRST AP PELLATE AUTHORITY, MUMBAI, HAVE BEEN CHALLENGED. SINCE THE ISSUE AND THE FACTS ARE IDENTICAL, ARGUED/HEARD TOGETHER, THEREFORE, BOTH THESE APPEALS ARE BEING DISPOSED OFF BY THIS C OMMON AND CONSOLIDATED ORDER. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD S HRI VIJAY KUMAR SONI. LD. DR, WHO ADVANCED HIS ARGUMENT S WHICH ARE IDENTICAL TO THE GROUND RAISED. NONE APPE ARED FOR THE ASSESSEE IN SPITE OF ISSUANCE OF REGISTERED NOT ICE, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX-PART E, QUA THE ASSESSEE, AND PROCEED TO DISPOSE OFF THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE LD. ASSESSING OFFICER PASSED OR DER U/S 201(1) AND 201(1A) ON 29/11/2011 AND CHARGED TAX AN D INTEREST AT RS.2,53,67,314/- AND RS.1,27,80,684/- F OR NON- DEDUCTION OF TAX ON PREMIUM PAID TO CIDCO. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT FINDING RECORDED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS):- M/S MILLENIUM ASSOCIATES & M/S MILLENIUM CORPORATION ITA NOS. 3172 & 3173/MUM/2014 3 4. I HAVE GONE THROUGH THE SAME AND NOTED THAT SA ME IS FOR PAYMENT OF LEASE PREMIUM AS WELL AS LAND REVENUE OF PLOT NO.11 IN SECTOR 10A FOR THE DEVELOPMENT. AGAIN BY AGREEME NT DATED 20.04.2010 FOR AND AMOUNT OF RS.22,75,54,857/- FOR THE PLOT NO.9 & 10 IN SECTOR 10A. APPELLANT HAS ALSO RELIED UPON DECISION GIVEN BY ITAT, MUMBAI IN CASE OF MR. WADHAVA & ASSOCIATES REALTORS PVT. LTD. ITA NO.695/MUM/2012 AND SHREE NAMAN DEVE LOPERS LTD. ITA NO.686 & 687/MUM/2012 AND M/S SHAH GROUP BUILDERS LTD. I.T.A. NO.4523/MUM/2012. 5. I HAVE GONE THROUGH THE SAME AND FIND THAT SAME ARE IN FAVOUR OF APPELLANT. ALSO IN THE CASE OF PANBARI TE A COMPANY LTD. 57 ITR 422 (SC) HONBLE SUPREME COURT DECIDED THAT THE LEASE PREMIUM IS PAID IS A CAPITAL RECEIPT AND NOT REVENUE IN NATURE. IN VIEW OF THIS I AM CONVINCED THAT APPELL ANT WAS NOT LIABLE TO DEDUCT TAX ON THE PAYMENT OF LEASE PREMIU M MADE TO CIDCO AND HENCE AND NOT BE HELD AS AN ASSESSEE IN D EFAULT. CONSEQUENTLY ACTION OF ASSESSING OFFICER TO LEVY TA X U/S 201 AND INTEREST U/S 201(1A) BE NOT SUSTAINABLE, THE ADDITI ON MADE ARE DELETED HEREWITH. FURTHER IN APPEAL BEARING NO.CIT(A)-14/IT 1255 FOR A.Y. 2010- 11, AS DISCUSSED ABOVE THE ISSUE INVOLVED THE SAME, THE DECISIONS RELIED UPON BY THE ASSESSING OFFICER AS WELL AS APP ELLANT ALSO BEING SAME, IN ESSENCE THE MATTER BEING ON THE SAME LINE APPEAL IN THE CASE IS ALSO ALLOWED. 2.2. THE FACTS, IN BRIEF, ARE THAT SURVEY PROCEEDI NGS U/S 133A WERE CARRIED OUT IN THE CASE OF M/S CITY AND I NDUSTRIAL M/S MILLENIUM ASSOCIATES & M/S MILLENIUM CORPORATION ITA NOS. 3172 & 3173/MUM/2014 4 DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. (CIDCO) ON 04/02/2011, WHEREIN, IT WAS NOTICED THAT THE ASSESS EES WERE ALLOTTED PLOTS ON PAYMENT OF LEASE PREMIUM OF RS.19,46,02,098/- AND RS.3,45,02,097/- IN F.Y. 2009 -10 AND 2010-11 RESPECTIVELY. AS PER THE ASSESSING OFFICER, THESE PAYMENTS WERE IN THE NATURE OF LEASE RENT, THEREFOR E, THE ASSESSEE WAS TO DEDUCT AT SOURCE ON THESE PAYMENTS AND THEREFORE IN THE ABSENCE OF SUCH DEDUCTION, THERE I S CONTRAVENTION OF THE PROVISIONS OF SECTION 194-I OF THE INCOME TAX ACT, 1961. THE ASSESSEES WERE TREATED IN DEFAUL TS U/S 201(1) AND 201(1A) OF THE ACT FOR NON-DEDUCTION OF TDS ON THE AMOUNT OF LEASE RENT. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), WHEREIN, FOLLOWING THE DECISION OF THE TRIBUNAL AND ALSO FROM THE HON BLE APEX COURT, THE ASSESSEES WERE HELD TO BE NOT IN DEFAULT . THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS T RIBUNAL. WITHOUT GOING INTO MUCH DELIBERATION, THE MATERIAL AVAILABLE ON RECORD AND THE ASSERTIONS MADE BY THE LD. DR, WE FIND THAT THE TRIBUNAL, FOLLOWING THE DECISION FROM HONBLE A PEX COURT IN MADHAVRAO SINDHIA VS UNION OF INDIA AIR 1971 SC 530 (AT PAGE 533), AND IN PANWARI TEA COMPANY LTD. 57 ITR 4 22 (SC) HELD THAT LEASE PREMIUM PAID IS A CAPITAL RECEIPT A ND NOT OF REVENUE IN NATURE, THUS, WE FIND NO INFIRMITY IN TH E CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S). EVEN OTHERWISE, THE CASE OF THE ASSESSES FIND SUPPORT FR OM THE DECISION IN THE CASE OF WADHWA & ASSOCIATES REALTOR S PVT. LTD. (ITA NO.695/MUM/2012) WHEREIN, LEASE PREMIUM PAID T O MMRDA, FOR ACQUIRING LEASE HOLD RIGHTS, IN A LAND A T BKC WAS M/S MILLENIUM ASSOCIATES & M/S MILLENIUM CORPORATION ITA NOS. 3172 & 3173/MUM/2014 5 HELD TO BE CAPITAL EXPENDITURE. IDENTICALLY, IN ITO VS NAMAN DEVELOPERS (ITA NO.686 & 687/MUM/2012) FOLLOWING TH E DECISION OF THE WADHWA & ASSOCIATES REALTORS PVT. L TD. DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN ITO VS SHAH GROUP BUILDERS (ITA NO.4523/MUM/2012) THE LEASE PRE MIUM PAID TO CIDCO FOR ACQUIRING LEASE HOLD RIGHT WAS HE LD TO BE CAPITAL IN NATURE, THUS, IT CAN BE CONCLUDED THAT N O DEFAULT WAS COMMITTED BY THE ASSESSES U/S 201, 201(1A) OF T HE ACT. BOTH THE APPEALS OF THE REVENUE, BEING ON IDENTICAL FACTS, ARE THEREFORE, DISMISSED. FINALLY, BOTH THE APPEALS OF THE REVENUE ARE DISMIS SED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 28/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 06/11/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.