Appeal Details
Counselvise Citation
[2014] 140 COUNSELVISE.COM (IT) 83695 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-09-2014
Appeal Filed By
Department
Bench Allotted
I
Next Hearing Date
28-08-2014
Assessment Year
2010-2011
Appeal Filed On
15-05-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI JH JH JH JH LAT; VJKSM+K] LAT; VJKSM+K] LAT; VJKSM+K] LAT; VJKSM+K] YS[KK YS[KK YS[KK YS[KK LNL; LNL; LNL; LNL; ,OA ,OA ,OA ,OA JH JH JH JH VFER 'KQDYK VFER 'KQDYK VFER 'KQDYK VFER 'KQDYK] ] ] ] U;KF;D U;KF;D U;KF;D U;KF;D LNL; DS LE{K LNL; DS LE{K LNL; DS LE{K LNL; DS LE{K BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER VK;DJ VIHY LA[;K / ITA NO.3857/MUM/2013 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2010-11 VK;DJ VIHY LA[;K / ITA NO.3858/MUM/2013 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2011-12 ITO(OSD)-3(2), MUMBAI, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W) MUMBAI 400002. VS.` M/S THE INDIAN FILM COMBINE PVT. LTD. MAKER TOWER F 01 ST FLOOR, 85, CUFFE PARADE, MUMBAI 400 005. PAN:- AAACI3611E APPELLANT RESPONDENT ORDER PER BENCH THE AFORESAID APPEALS HAVE BEEN PREFERRED BY THE RE VENUE, CHALLENGING THE IMPUGNED CONSOLIDATED ORDER PASSED BY CIT(A) DATED 3.1.2012, IN RELATION TO ORDER REVENUE BY/ JKTLO DH VKSJ LS JKTLO DH VKSJ LS JKTLO DH VKSJ LS JKTLO DH VKSJ LS SHRI PRAKASH JOTWANI ASSESSEE BY / FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS SHRI N. SATHYAMOORTHY DATE OF HEARING 28.08.2014 DATE OF PRONOUNCEMENT 03 .0 9 .201 4 M/S THE INDIAN FILM COMBINE PVT. LTD. 2 | P A G E PASSED U/S 201(1) AND 201(1A), FOR THE ASSESSMENT Y EARS 2010-11 AND 2011-12. SINCE THE ISSUES INVOLVED IN BOTH THE APPEALS ARE C OMMON, THEREFORE, THE SAME ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER . 2. THE REVENUE HAS TAKEN VARIOUS GROUNDS OF APPEAL, HOWEVER, THE MAIN CONTENTION OF THE REVENUE IS THAT, THE LD. CIT(A) H AS ERRED IN LAW AND FACTS IN HOLDING THAT THE AMOUNTS PAID TO MUMBAI METROPOLITA N REGIONAL DEVELOPMENT AUTHORITY (MMRDA), AS PREMIUM FOR ACQUIRING LEASED HOLD RIGHTS IN RESPECT OF THE LEASED PLOT, IS IN THE NATURE OF RENT AS DEFI NED U/S 194-I AND, THEREFORE, THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE. 3. BEFORE US, LD. COUNSEL, SHRI PRAKASH JOTWANI SU BMITTED THAT THE ISSUE INVOLVED IN THESE APPEALS ARE SQUARELY COVERED BY S ERIES OF DECISIONS OF MUMBAI BENCH TRIBUNAL AS WELL AS OTHER BENCHES OF THE TRIB UNAL, WHEREIN IT HAS BEEN CONSISTENTLY HELD THAT THE AMOUNT OF PREMIUM PAID FOR ACQUIRING LEASE HOLD RIGHT TO GOVERNMENT AUTHORITIES, REPRESENTS TRANSFER PRICE O F THE LAND ON LEASE HOLD BASIS AND NO PART THEREOF, FALLS WITHIN THE MEANING OF RE NT AS CONTEMPLATED U/S 194-I AND, THEREFORE, NO TDS IS REQUIRED TO BE DEDUCTED. 4. LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF ASSESSING OFFICER. 5. AFTER CAREFULLY CONSIDERING THE RELEVANT FINDING S OF THE ASSESSING OFFICER AND CIT(A), AS WELL AS VARIOUS DECISIONS OF THE TRI BUNAL RELIED UPON BY THE M/S THE INDIAN FILM COMBINE PVT. LTD. 3 | P A G E COUNSEL, WE FIND THAT THE ISSUE RAISED BY THE DEPA RTMENT IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY CATENA OF DECISIONS OF M UMBAI BENCH OF TRIBUNAL AND OTHER BENCHES OF THE TRIBUNAL, IN AS MUCH AS, IN AL L THE DECISIONS IT HAS BEEN HELD THAT PREMIUM PAID TO SUCH GOVERNMENT AUTHORITIES FO R ACQUIRING LEASE HOLD RIGHTS, DOES NOT FALL WITHIN THE MEANING OF RENT AS CONTE MPLATED IN SECTION 194-I. IN THE PRESENT CASE, THE ASSESSEE IS DEVELOPING A PROJECT ON LEASE HOLD LAND ALLOTTED TO IT BY THE GOVERNMENT OF MAHARASHTRA IN BANDRA-KURLA COMPL EX. THE ASSESSEE HAD CONSTRUCTED THE OFFICE BUILDING ON THE SAID LAND GI VEN ON LEASE BY THE GOVERNMENT. DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEA RS 2010-11 AND 2011-12, THE ASSESSEE HAD PAID FOLLOWING AMOUNTS TO MMRDA AS PRE MIUM FOR ADDITIONAL AREA FREE OF FSI, FOR STAIRCASE, LIFTS, LIFT LOBBIES ETC . FINANCIAL YEAR ASSESSMENT YEAR DATE OF PAYMENT PREMIUM PAID TOTAL PREMIUM PAID 2009-10 2010-11 19/06/2009 08/12/2009 8/12/2009 8/12/2009 08/12/2009 2,28,90,041/- 2,11,15,944/- 4,19,98,293/- 4,19,24,952/- 2,10,93,237/- 14,9022,467/- 2010-11 2011-12 03/06/2010 4,58,36,000 4,58,36,000 TOTAL 19,48,58,467/- M/S THE INDIAN FILM COMBINE PVT. LTD. 4 | P A G E THE ASSESSING OFFICER IN A VERY DETAILED ORDER HAS HELD THAT THE LEASE PREMIUM OF RS. 4,58,36,000 IN THE A.Y. 2010-11 AND RS. 19,48,58,467/- IN A.Y. 2011-12 PAID TO MMRDA IS IN THE NATURE OF RENT AN D HENCE, THE ASSESSEE WAS LIABLE TO DEDUCT TAX U/S 194-I OF THE INCOME TAX AC T. 6. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HIS ISSUE IS COVERED BY THE SERIES OF DECISIONS AND ALSO FILED ITS DETAILED SUB MISSIONS, WHICH HAVE BEEN INCORPORATED IN THE ORDER. THE LD. CIT(A) AFTER CON SIDERING THE ENTIRE FACTS AND MATERIAL PLACED ON RECORD HELD, AS UNDER:- IN THE PRESENT CASE, THE WRITTEN SUBMISSIONS FURNI SHED BY THE APPELLANT AND THE ORDERS PASSED BY THE ASSESSING OFFICER HAVE BEEN CONSIDERE D BY ME. IT IS SEEN THAT THE FACTS IN THE CASE OF THE APPELLANT ARE SIMILAR TO THE FACTS IN THE CASE SHREE NAMAN DEVELOPERS LTD AND OTHER CASES CITED IN PARA-6 ABOVE. HENCE, I T IS EVIDENT THAT THE PREMIUM OF RS. 19,48,58,467/- IN RESPECT OF THE LEASED PLOT OF LA ND FOR ADDITIONAL FSI, PAID BY THE APPELLANT IS NOT IN THE NATURE OF RENT AS CONTEMPLA TED U/S 194-I OF THE ACT. IT IS THUS ALSO EVIDENT THAT THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S 194-I OF THE INCOME TAX ACT, 1961. I HOLD ACCORDINGLY. THE DEMAN DS OF RS. 55,00,320 FOR ASSESSMENT YEAR 2010-11 AND RS. 2,33,83,020/- FOR A SSESSMENT YEAR 2011-12 RAISED BY THE ASSESSING OFFICER, U/S 201(1)/201(1A) OF THE AC T BY INVOKING THE PROVISIONS OF SECTION 194I ARE DELETED. 7. SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNA L IN FOLLOWING ORDERS:- (I) INCOME TAX OFFICER-(TDS) VS. M/S NAVI MUMBAI SEZ PV T. LTD IN ITA NOS. 738 TO 741/MUM/2012 (II) INCOME TAX OFFICER (OSD) (TDS) VS. M/S TRENT LIMITE D IN ITA NOS. 4629/MUM/2012 (III) INCOME TAX OFFICER VS. THE INDIAN NEWS PAPERS SOCIE TY IN ITA NOS. 5207 & 5208/DEL/2012 (IV) DY. COMMISSIONER OF INCOME TAX VS. M/S PARADISE INF RA-CON PVT. LTD. IN ITA NO. 4592/MUM/2012. IN THE AFORESAID ORDERS THE TRIBUNAL HAS INVARIABL Y HELD THAT, SUCH PAYMENTS MADE TO GOVERNMENT AUTHORITIES LIKE MMRDA, REPRESENTS TR ANSFER PRICE OF THE LAND ON M/S THE INDIAN FILM COMBINE PVT. LTD. 5 | P A G E LEASE HOLD BASIS AND IT CANNOT BE CONTEMPLATED AS RENT WITHIN THE MEANING OF SECTION 194-I AND, THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX. ACCORDINGLY, RESPECTFULLY FOLLOWING THE SAME, WE AL SO HOLD THAT PAYMENT ON ACCOUNT OF PREMIUM BY THE ASSESSEE TO MMRDA TO ACQU IRE LEASE HOLD RIGHTS DOES NOT FALL WITHIN THE MEANING OF RENT U/S 194-I AND T HUS THE ORDER OF CIT(A) IS AFFIRMED. THE VARIOUS GROUNDS RAISED BY THE REVENUE THUS STANDS DISMISSED. 10. IN THE RESULT APPEALS OF THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DAY OF SEPTEMBER 2014 SD/- SD/- ( SANJAY ARORA ) ( AMIT SHUKLA ) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D U;KF;D U;KF;D U;KF;D LNL; LNL; LNL; LNL; ) MUMBAI DATED 3-09-2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI
