ACIT TDS 1(2), MUMBAI V. INDIAN OIL CORPORATION LTD, MUMBAI

ITA 4026/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0473 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 26-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: JASAN SANCTIS
• Keywords: Maximum Marginal Rate
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAVISH SOOD (JM) I.T.A. NO. 4026 /MUM/20 15 (ASSESSMENT YEAR 20 12 - 13 ) ACIT TDS - 1(2) ROOM NO. 803 K.G. MITTAL HOSPITAL BLDG CHARNI ROAD WEST MUMBAI - 400 002. VS. M/S. INDIAN OIL CORPORATION LTD. INDIAN OIL BHAWAN G - 9, ALI YAVAR JUNG MARAG, BANDRA (E) MUMBAI - 400 051. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACI1681G ASSESSEE BY SHRI JASAN SANCTIS DEPARTMENT BY S HRI M.C. OMI NINGSHEN DATE OF HEARING 1. 8 . 2 01 7 DATE OF PRONOUNCEMENT 1 . 8 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 6.4.2015 PASSED BY THE LEARNED CIT(A) - 59, MUMBAI AND IT RELATES TO A.Y. 2012 - 13. THE REVENUE IS AGGRIEVED B Y DECISION OF THE LEARNED CIT(A) IN HOLDING THAT THE AMOUNT PAID BY THE ASSESSEE ON ACCOUNT OF LEASE RENT TO MMRDA IS NOT IN NATURE OF RENT FALLING UNDER SECTION 194I OF THE ACT AND CONSEQUENTLY THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE THEREON U/ S. 194I OF THE ACT. 2. WE HEARD THE P ARTIES AND PERUSED THE RECORD. T HE ASSESSEE TOOK TWO PLOTS OF LAND SITUATED AT BANDRA - KURLA COMPLEX FROM MMRDA THROUGH A LEASE AGREEMENT DATED 31.12.1991 AND ANOTHER PLOT OF LAND WAS TAKEN THROUGH A LEASE AGREEMENT DAT ED 26.4.2006. THE ASSESSEE PAID LEASE PREMIUM TO MMRDA AND DID NOT DEDUCT TAX AT SOURCE THERE FROM U/S. 194I OF THE ACT. HENCE, THE ASSESSIN G OFFICER TREATED THE ASSESSEE A S AN ASSESSEE IN DEFAULT AND RAISED DEMAND U/S. 201(1) AND CHARGED INTEREST U/S. 201 (1A) OF THE ACT. THE LEARNED CIT(A) FOLLOWED DECISION RENDERED BY THE COORDINATE BENCH IN THE TRIBUNAL IN THE CASE OF M/S. WADHWA ASSOCIATES REALTORS (P) LTD. (2013) 36 TAXAMAN 526, WHEREIN IT WAS HELD THAT LEASE PREMIUM PAID BY THE ASSESSEE TO MMRDA INDIAN OIL CORPORATION LTD. 2 CANN OT BE EQUATED TO THE RENT DEFINED U/S. 194I OF THE ACT. ACCORDINGLY, THE LEARNED CIT(A) HELD THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE U/S. 194I OF THE ACT IN RESPECT PAYMENT MADE BY IT TO MMRDA. AGGRIEVED , THE REVENUE HAS FILED THIS APPEAL B EFORE US. 3. AT THE TIME OF HEARING LEARNED AR SUBMITTED THAT IDENTICAL ISSUE CAME TO BE CONSIDERED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN A.Y. 2009 - 10 AND THE SAID DECISION OF THE TRIBUNAL HAS BEEN FOLLOWED BY ANOTHER BENCH OF THE TRIBUNAL I N ASSESSEES OWN CASE IN A.YS. 2010 - 11 AND 2011 - 12. HE SUBMITTED THAT THE TRIBUNAL HAS HELD THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM LEASE PREMIUM PAYMENT GIVEN TO MMRDA. 4. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT CONTROVERT FACTU AL ASPECTS PRESENTED BY LEARNED AR. 5. HAVING HEARD THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT CALL FOR ANY INTERFERENCE AS IDENTICAL VIEW HAS BEEN EXPRESSED IN THE ORDER PASSED BY THE COORDINATE BENCH IN AS SESSEES OWN CASE IN A.Y. 2009 - 10 WITH FOLLOWING OBSERVATIONS : - 2. IN THIS APPEAL, ALTHOUGH REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE ONLY GRIEVANCE IS AGAINST THE ACTION OF THE CIT(A) IN HOLDING THAT THE PROVISIONS OF SEC. 194I OF THE ACT ARE NOT APPLICABLE IN CONNECTION WITH PAYMENT OF RS.1,07,46,381/ - MADE BY THE RESPONDENT - ASSESSEE TO MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA). 3. IN BRIEF, THE RELEVANT FACTS ARE THAT IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD PAID SUM OF RS.1,07,46,381/ - TO MMRDA IN CONNECTION WITH PLOT ALLOTTED TO IT ON LEASE. ACCORDING TO THE ASSESSING OFFICER, SUCH PAYMENT CONSTITUTED LEASE PREMIUM WHICH WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S. 194I OF THE ACT. CONSEQUENTLY, THE AS SESSEE WAS HELD TO BE AN ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT FOR NON - DEDUCTION OF TAX AT SOURCE AND ALSO LIABLE FOR PAYMENT OF INTEREST U/S. 201(1 A) OF THE ACT . AS A RESULT THE TOTAL DEMAND OF RS .33,17,169/ - WAS RAISED IN TERMS OF SEC. 201(1) AND 201(1 A) OF THE ACT . BEFORE CIT(A), ONE OF THE POINTS CANVASSED BY THE ASSESSEE WAS THAT THE IMPUGNED PAYMENT WAS MADE FOR SEEKING EXTENSION OF TIME TO CONSTRUCT THE BUILDING ON THE LEASEHOLD PLOT OF LAND ALLOTTED BY MMRDA, AND THEREFORE, IT COULD NOT BE CONSTRUED AS PAYMENT OF RENT WITHIN THE MEANING OF SEC. 194I OF THE ACT. THE CIT(A) FOLLOWED THE DECISION OF HIS PREDECESSOR IN THE ASSESSEE S OWN INDIAN OIL CORPORATION LTD. 3 CAS E FOR ASSESSMENT YEAR 2010 - 11 AND HELD THAT THERE WAS NO JUSTIFICATION FOR INVOKING SEC. 194I OF THE ACT IN CONTEXT OF THE IMPUGNED PAYMENT. ACCORDINGLY, THE ACTION OF THE ASSESSING OFFICER HAS BEEN SET - ASIDE. 4. IN THIS BACKGROUND, REVENUE IS IN APPEAL BE FORE US. AT THE TIME OF HEARING, IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE DECISION OF CIT(A) IS IN LINE WITH THE EARLIER DECISIONS OF THE MUMBAI BENCH OF THE TRIBUNAL ON SIMILAR ISSUE VIZ. M/S. WADHWA ASSOCIATES REALTORS (P) LTD., 36 TAXMAN 526 ( MUM) AND NAVI MUMBAI SEZ (P) LTD., 147 ITD 261 (MUM). THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ORDER BY THE CIT(A) IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2010 - 11, WHICH HAS BEEN FOLLOWED BY THE CIT(A) IN THE INSTANT YEAR, WAS B ASED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. WADHWA ASSOCIATES REALTORS ( P) LTD. (SUPRA), AND THEREFORE, THE ORDER OF THE CIT(A) DOES NOT REQUIRE ANY INTERFERENCE. IT HAS ALSO BEEN POINTED OUT THAT SUCH PRECEDENTS CONTINUE T O HOLD THE FIELD. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVENUE HAS NOT BROUGHT OUT ANY COGENT MATERIAL WHICH WOULD REQUIRE US TO INTERFERE WITH THE CONCLUSION OF THE CIT(A), WHICH IS HEREBY AFFIRMED. NOTABLY, THE DECISION OF THE CIT (A) IS BASED ON THE DECISIONS OF THE MUMBAI BENCH OF THE TRIBUNAL ITSELF AND IT HAS NOT BEEN SHOWN BY THE DEPARTMENT THAT ANY OF SUCH DECISIONS HAVE BEEN ALTERED BY ANY HIGHER AUTHORITY. 6. IN THE RESULT, THE ORDER OF THE CIT(A) IS AFFIRMED AND APPEAL OF T HE REVENUE IS DISMISSED. 6. WE NOTICE THAT THE ORDER PASSED IN AY 2009 - 10 HAS BEEN FOLLOWED BY ANOTHER CO - ORDINATE BENCH IN THE ASSESSEES OWN CASE IN AY 2010 - 11 AND 2011 - 12. CONSISTENT WITH THE VIEW TAKEN BY THE CO - ORDINATE BENCHES, WE UPHOLD THE ORDER P ASSED BY THE LEARNED CIT(A) FOR THE YEAR UNDER CONSIDERATION ALSO SINCE THE LD CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE TRIBUNAL IN DISPOSING THESE MATTERS . 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN P RONOUNCED IN THE COURT ON 01 . 8 .201 7. SD/ - SD/ - (RAVISH SOOD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 01 / 8 / 20 1 7 INDIAN OIL CORPORATION LTD. 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI