DCIT, Noida V. M/s. Jaypee Sports International Ltd., Noida

ITA 4027/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0081 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Keywords: Business income; Capital expenditure
• Section: 142(1); 40(a)(ia); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCHC NEW DELHI BEFORE SRI R.K.PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 4027/DEL/2015 A.Y. 2011-12 DCIT INTERNATIONAL TAXATION, CIRCLE-NOIDA, AAYAKAR BHAWAN, SECTOR-24, NOIDA VS . JAYPEE SPORTS INTERNATIONAL LTD., SECTOR-128, NOIDA. PAN NO. AABCJ9037E (APPELLANT) (RESPONDENT) REVENUE BY : SH. MANISH GUPTA, SR. DR ASSESSEE BY : SH. ASHWANI KUMAR GARG, ADV. DATE OF HEARING : 28/11/2018 DATE OF PRONOUNCEMENT : 06/12/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST OR DER DATED 27/03/15 PASSED BY LD. CIT (A)-2, NOIDA FOR A SSESSMENT YEAR 2011-12 ON FOLLOWING GROUNDS OF APPEAL: 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE PROVISIONS OF SECTION 40 (A)(IA) ARE NOT APPLICABLE WHERE THE EXPENDITURE IN QUESTION IS CAPITALIZED AN D NO DEDUCTION OF SUCH EXPENDITURE HAS BEEN CLAIMED WHILE COMPUTING BUSINE SS INCOME. A) THE LD. CIT (A) HAS ERRED IN NOT APPRECIATING TH E FACT THAT : I) THE SECTION 40 (A)(IA) BEGINS WITH A NON-OBSTANTE CLAUSE AND IT HAS AN OVERRIDING EFFECT ON THE PROVISIONS OF SECTION 30 T O 38. ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 2 II) THE WORD EXPENDITURE' HAS NOT BEEN DEFINED IN TH E ACT. IT IS WORD OF WIDE AMPLITUDE AND TAKES WITHIN ITS AMBIT ANY AMOUN T WHICH HAS THE EFFECT ON THE DEBIT SIDE OF THE P&L ACCOUNT. EVEN CAPITALI ZED AMOUNTS HAVE SUCH EFFECT ON THE P&L ACCOUNT, ALBEIT IN THE YEAR WHEN ALLOCATION OUT OF SUCH CAPITAL EXPENDITURE IS MADE AGAINST THE PROFITS. III) DEDUCTION OF AN EXPENDITURE MAY OR MAY NOT BE CLAI MED BY DIRECT DEBIT IN THE P&L ACCOUNT. WHERE AN EXPENDITURE IS CAPITAL IZED IN AN YEAR, IT DOES NOT MEAN THAT IT IS NOT BEING CLAIMED AS A DEDUCTION, O NLY THE TIME OF DEDUCTION IS DEFERRED. IT WILL BE CLAIMED AS A DEDUCTION IN THE YEAR WHEN THE CORRESPONDING INCOME IS RECOGNIZED. IV) THERE IS NOTHING IN THE PROVISION WHICH SUGGESTS T HAT THE PROVISION IS APPLICABLE ONLY WHERE THE EXPENDITURE IN QUESTION H AS BEEN CHARGED TO THE P&L ACCOUNT OF A PARTICULAR YEAR. THE EXPENDITURE W HICH IS CAPITALIZED IN ANY YEAR UNDER WORK-IN- PROGRESS ETC. IS ULTIMATELY C HARGED TO THE P&L ACCOUNT WHEN THE CORRESPONDING INCOME IS RECOGNIZED IN A SU BSEQUENT YEAR. THEREFORE, SUCH OUTGO/EXPENDITURE, IF NOT OUT RIGHTLY DISALLOW ED OR ADDED TO THE P&L ACCOUNT, IS LIABLE TO BE REDUCED FROM WORK-IN-PROG RESS OR THE CAPITAL ACCOUNT, WHICH WOULD BE A MODE OF GIVING EFFECT TO THE PROVI SIONS OF SECTION 40(A)(IA). V) ALL OUTGOINGS, REGARDLESS OF WHETHER CAPITAL OR REVENUE IN NATURE, ARE MEANT TO BE COVERED BY THE WORD EXPENDITURE FOR T HE PURPOSE OF THIS SECTION, ONLY THE MODE OF GIVING EFFECT TO THE PROVISION OF SECTION 40 (A)(IA) SHALL BE DIFFERENT. 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE AMOUNT OF RS. 2,5 1,17,344/- RECEIVED BY THE ASSESSEE FROM M/S FORMULA ONE MANAGEMENT LIMITED WA S NOT LIABLE TO BE TREATED AS BUSINESS INCOME IN THE HANDS OF THE ASSE SSEE FOR THE YEAR UNDER ASSESSMENT. 3) THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MODIF Y OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : ASSESSEE FILED ITS RETURN OF INCOME ON 20/09/11, DE CLARING NIL INCOME. THE SAME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT, AND CASE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, NO TICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED. THEREAFTER, N OTICE UNDER SECTION 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO ASSESSEE. ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 3 IN RESPONSE TO STATUTORY NOTICES, REPRESENTATIVE OF ASSESSEE APPEARED BEFORE LD. AO AND FILED NECESSARY DETAILS WHICH WERE PLACED ON RECORD. 2.1 LD.AO OBSERVED THAT ASSESSEE IS ENGAGED IN BUSI NESS TO DEVELOP FACILITIES OF INTERNATIONAL STANDARD FOR SP ORTS AND RECREATION ACTIVITIES. LD.AO CALLED UPON ASSESSEE T O FURNISH INFORMATION REGARDING THE ACTIVITIES CARRIED ON BY ASSESSEE. DURING COURSE OF TDS SURVEY, IT WAS FOUND THAT ASSE SSEE MADE PAYMENT OF INTEREST, LEASE RENT AND COMMISSION TO V ARIOUS PARTIES ON WHICH ASSESSEE SHOULD HAVE TO DEDUCT TDS. AFTER VERIFYING DETAILS FILED BY ASSESSEE LD.AO HELD THAT, NO DEDUC TION COULD BE ALLOWED TO ASSESSEE AND WAS LIABLE TO BE DISALLOWED UNDER PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. LD. AO ACCORDINGLY MADE FOLLOWING ADDITION UNDER SECTION 40(A)(IA) OF THE A CT: INTEREST PAID TO YEIDA : RS. 51, 08, 02, 72 8/- BANK GUARANTEE COMMISSION : RS.1, 13, 06, 210/- LEASE RENT : RS. 23, 05, 98, 619/- 2.2 APART FROM ABOVE LD.AO ALSO MADE ADDITION AMOUN TING TO RS.2,51,19,000/-, RECEIVED FROM FORMULA ONE MANAGEM ENT LTD. 2.3 AGGRIEVED BY ADDITIONS MADE BY LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHO DELETED ADDITIONS. AGGRIEVED BY ORDER OF LD. CIT(A), REVENUE IS IN APP EAL BEFORE US. 3. GROUND NO.1 IS IN RESPECT OF ADDITIONS THAT IS DELETED BY LD. CIT (A) UNDER SECTION 40(A)(IA) OF THE ACT. ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 4 4. LD. SR. DR PLACED RELIANCE UPON THE ORDERS OF AU THORITIES BELOW AS WELL AS ORDER DATED 31/08/17 PASSED BY COO RDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A SSESSMENT YEAR 2011-12 TO 2013-14 IN ITA NO. 4279 -4281/DEL/2 015. 5. LD.AR SUBMITTED THAT, NONE OF THESE EXPENSES WER E CHARGED TO PROFIT AND LOSS ACCOUNT, AS NO REVENUE WAS RECOG NISED DURING THE YEAR UNDER CONSIDERATION. HE SUBMITTED THAT LD. AO HAS ERRED IN DISALLOWING THESE PAYMENTS UNDER SECTION 40(A)(I A) OF THE ACT WITHOUT CONSIDERING THE FACT THAT, THESE PAYMENTS H AS NOT YET BEEN CHARGED TO THE PROFIT AND LOSS ACCOUNT AS TAXA BLE INCOME OF ASSESSEE. 6. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. WE HAVE ALSO PERUSED ORDER PASSED BY THIS TRIBUNAL DATED 31/08/17 PASSED BY CO ORDINATE BENCH (SUPRA), IN ASSESSEES OWN CASE PLACED AT PAG E 32-51 OF PAPER BOOK. 7. IT IS OBSERVED THAT THIS TRIBUNAL CONSIDERED DEM AND RAISED BY LD.AO UNDER SECTION 201(1) AND SECTION 201 (1A) OF THE ACT, FOR ASSESSMENT YEAR 2011-12 IN CASE OF ASSESSEE. 7.1 WE DO NOT AGREE WITH THE ARGUMENT ADVANCED BY L D. AR THAT, AS EXPENSES WERE NOT CHARGED TO PROFIT AND LO SS ACCOUNT DUE TO NO REVENUE RECOGNITION, NO DISALLOWANCE COUL D BE MADE. INCOME TAX ACT IS VERY CLEAR/SPECIFIC REGARDING THE TIME WHEN TDS NEEDS TO BE DEDUCTED. THE STATUTE REQUIRES TDS TO BE ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 5 DEDUCTED AT THE TIME OF CREDIT OF SUCH INCOME TO TH E ACCOUNT OF PAYEE OR AT THE TIME OF PAYMENT THEREOF WHICHEVER I S EARLIER. 7.2 WE ARE, THEREFORE, OF THE CONSIDERED OPINION TH AT TDS SHOULD HAVE BEEN DEDUCTED AS THE CASE MAY BE. WE, THEREFORE, GIVE FOLLOWING ANALYSIS REGARDING APPLICABILITY OF TDS PROVISIONS ON EACH OF THE THREE ITEMS UNDER CONSIDERATION. (I) LEASE RENT PAID BY ASSESSEE TO YAMUNA EXPRESSWA Y INDUSTRIAL DEVELOPMENT AUTHORITY LTD. (YEIDA) AMOUNTING TO RS. 23,05,98,619/- IT IS OBSERVED THAT LEASE RENT PAID BY ASSESSEE HAS BEEN CONSIDERED BY THIS TRIBUNAL AND IS COVERED IN FAVOU R OF REVENUE BY FOLLOWING DECISION OF HONBLE DELHI HIGH COURT IN CASE OF RAJESH PROJECTS (INDIA) PVT. LTD VS. CIT REPORTED IN ( 2017) 78 TAXMAN 263 , WHEREIN HONBLE COURT OBSERVED AS UNDER: 20. IN VIEW OF THE ABOVE ANALYSIS, THE COURT HEREBY CO NCLUDES AS FOLLOWS: (1) AMOUNTS PAID AS PART OF THE LEASE PREMIUM IN TERMS OF THE TIME-SCHEDULE(S) TO THE LEASE DEEDS EXECUTED BETWEEN THE PETITIONERS AND GNOIDA, OR BI - ANNUAL OR ANNUAL PAYMENTS FOR A LIMITED/SPECIFIC PERIOD TOWARDS ACQUISITION O F LEASE HOLD RIGHTS ARE NOT SUBJECT TO TDS, BEING CAPITAL P AYMENTS; (2) AMOUNTS CONSTITUTING ANNUAL LEASE RENT, EXPRESSED IN TERMS OF PERCENTAGE (E.G. 1%) OF THE TOTAL PREMIUM FOR TH E DURATION OF THE LEASE, ARE RENT, AND THEREFORE SUBJECT TO TD S. SINCE THE PETITIONERS COULD NOT MAKE THE DEDUCTIONS DUE T O THE INSISTENCE OF GNOIDA, A DIRECTION IS ISSUED TO THE SAID AU THORITY (GNOIDA) TO COMPLY WITH THE PROVISIONS OF L AW AND MAKE ALL PAYMENTS, WHICH WOULD HAVE BEEN OTHERWISE PART OF THE DEDUCTIONS, FOR THE PERIODS, IN QUESTION, TI LL END OF THE DATE OF THIS JUDGMENT. ALL PAYMENTS TO BE MADE TO I T, HENCEFORTH, SHALL BE SUBJECT TO TDS. ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 6 (3) AMOUNTS WHICH ARE PAYABLE TOWARDS INTEREST ON THE PAYMENT OF LUMP SUM LEASE PREMIUM, IN TERMS OF THE LEASE WHICH ARE COVERED BY SECTION 194- A ARE COVERED BY THE EXEMPTION UNDER SECTION 194A (3) (F) AND THEREFORE, NOT SUBJECTED TO TDS. (4) FOR THE REASON MENTIONED IN (3) ABOVE, ANY PAYMENT OF INTEREST ACCRUED IN FAVOUR OF GNOIDA BY ANY PETITIO NER WHO IS A BANK TO THE GNOIDA, TOWARDS FIXED DEPOSITS, ARE ALSO EXEMPT FROM TDS. 21. IN VIEW OF THE ABOVE CONCLUSIONS, IT IS HEREBY DIR ECTED THAT WHEREVER AMOUNTS HAVE BEEN PAID BY THE PETITIONERS, TOWARDS TDS AS A RESULT OF THE COERCIVE PROCESS USED BY THE REV ENUE, THE GNOIDA SHALL MAKE APPROPRIATE ORDERS TO CREDIT/REIM BURSE SUCH PAYMENTS. IN CASE PAYMENTS ARE MADE THROUGH DEPOSIT , OVER AND ABOVE THE RENTAL AMOUNTS PAID TO THE GNOIDA, WITHOU T TDS, THE INCOME TAX AUTHORITIES SHALL NOT PURSUE ANY COERCIV E PROCEEDINGS; GNOIDA SHALL DULY REIMBURSE THE PETITIONERS FOR SUC H AMOUNTS. ANY AMOUNTS DEPOSITED IN THE COURT OR WITH THE REVE NUE, SHALL, TO THE EXTENT OF TDS LIABILITY ONLY BE APPROPRIATED FO R SUCH PURPOSE. IT IS CLARIFIED THAT GNOIDA SHALL ENSURE THAT REIMBURS EMENT IS MADE TO COMPENSATE THE PETITIONERS' EXCESS PAYMENTS; THE INCOME TAX AUTHORITIES SHALL NOT PURSUE ANY COERCIVE METHODS F OR RECOVERY OF THE AMOUNTS, OR PENALTY, ONCE THE BASIC LIABILITY ( WITH INTEREST, TO BE PAID BY GNOIDA) IS SATISFIED. THE IMPUGNED ORDERS A RE QUASHED; THE REVENUE SHALL MAKE CONSEQUENTIAL ORDERS, TO GIV E EFFECT TO THIS JUDGMENT, AFTER DULY HEARING THE PETITIONERS AND TH OSE LIKELY TO BE AFFECTED, WITHIN 12 WEEKS FROM TODAY. 7.3 THE AFORE STATED VIEW BY HONBLE DELHI HIGH COURT HAS BEEN AFFIRMED BY HONBLE SUPREME COURT IN CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY VS CIT REPORTED IN (2018) 95 TAXMAN 80. 8. IT IS OBSERVED THAT CO-ORDINATE BENCH OF THIS TR IBUNAL IN ASSESSEES OWN CASE (SUPRA), HELD TDS OUGHT TO BE D EDUCTED ON ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 7 LEASE RENT, BY FOLLOWING DECISION OF HONBLE DELHI HIGH COURT IN CASE OF RAJESH PROJECTS (INDIA) PVT. LTD VS. CIT (SUPRA). 8.1 ACCORDINGLY, RESPECTFULLY FOLLOWING HONBLE DEL HI HIGH COURT IN CASE OF RAJESH PROJECTS (INDIA) PVT. LTD VS. CIT (SUPRA), WE HOLD THAT, TDS NEEDS TO BE DEDUCTED ON LEASE RENT . (II) INTEREST PAID TO YAMUNA EXPRESSWAY DEVELOPMEN T AUTHORITY, AMOUNTING TO RS.51,08,02,728/-: 9. IT IS OBSERVED THAT COORDINATE BENCH OF THIS TRI BUNAL (SUPRA) HELD THAT, PAYMENT OF INTEREST TO YIEDA IS COVERED BY DECISION OF HONBLE ALLAHABAD HIGH COURT IN CASE OF CIT VS CANARA BANK, REPORTED IN 386 ITR 504, WHEREIN IT HAS BEEN HELD THAT, NOIDA IS A CORPORATION ESTABLISHED BY UTTAR PRADESH INDUSTRI AL AREA DEVELOPMENT ACT 1976(YIEDA), AND THEREFORE ASSESSEE WAS ENTITLED TO EXEMPTION OF PAYMENT OF TAX AT SOURCE U NDER SECTION 194A OF THE ACT. THIS TRIBUNAL HELD THAT YIEDA ALSO CONSTITUTE AN AUTHORITY UNDER STATE ACT, AND THEREFORE, IS COVERE D BY ABOVE REFERRED DECISION OF HONBLE ALLAHABAD HIGH COURT . HOWEVER, IN OUR CONSIDERED OPINION RECENTLY HONBLE SUPREME COURT IN CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY VS CIT REPORTED IN (2018) 95 TAXMANN 80, HELD AS UNDER : 52. IT IS ALSO RELEVANT TO NOTICE THAT THIS COURT IN GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION V. CIT [1997] 94 TAXMAN 64/ 227 ITR 414 AFTER CONSIDERING THE PROVISIONS OF SECTION 10(20A ) OF I.T. ACT HELD THAT GUJARAT INDUSTRIAL DEVELOPMENT CORPORATIO N IS ENTITLED FOR EXEMPTION UNDER SECTION 10(20A). THE GUJARAT INDUST RIAL DEVELOPMENT CORPORATION WAS HELD TO BE ENTITLED FOR EXEMPTION UNDER SECTION 10(20A) AT THE TIME WHEN THE PROVISIO N WAS IN EXISTENCE IN THE STATUTE BOOK AND AFTER ITS DELETIO N FROM THE STATUTE BOOK THE EXEMPTION IS NO MORE AVAILABLE. NOW, REVER TING BACK TO ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 8 SECTION 10(20) AS AMENDED BY FINANCE ACT, 2002, THE SAME HAS ALSO COME FOR CONSIDERATION BEFORE DIFFERENT HIGH C OURTS. A DIVISION BENCH OF THE ALLAHABAD HIGH COURT IN KRISHI UTPADAN MANDI SAMITI V. UNION OF INDIA [2004] 139 TAXMAN 258/267 ITR 460 STATED FOLLOWING: 'A BARE PERUSAL OF THE EXPLANATION OF SECTION 10(20 ) SHOWS THAT NOW ONLY FOUR ENTITIES ARE LOCAL AUTHORITIES FOR TH E PURPOSE OF SECTION 10(20), NAMELY, (I) PANCHAYAT, (II) MUNICIP ALITY; (III) MUNICIPAL COMMITTEE AND DISTRICT BOARD; (IV) CANTON MENT BOARD KRISHI UTPADAN MANDI SAMITI IS NOT ONE OF THE ENTIT IES MENTIONED IN THE EXPLANATION TO SECTION 10(20). IT MAY BE NOTED THAT THE EXPLANATION TO SECTION 10( 20) USES THE WORD 'MEANS' AND NOT THE WORD 'INCLUDES'. HENCE, IT IS NOT POSSIBLE FOR THIS COURT TO EXTEND THE DEFINITION OF 'LOCAL AUTHORITY' AS CONTAINED IN THE EXPLANATION TO SECTION 10(20), VIDE P. KASILINGAM V. P.S.G. COLLEGE OF TECHNOLOGY, AIR 199 5 SC 1395 (PARA 19). IT IS ALSO NOT POSSIBLE TO REFER TO THE DEFINITIONS IN OTHER ACTS, AS THE IT ACT NOW SPECIFICALLY DEFINES 'LOCAL AUTHORITY'. IT IS WELL SETTLED THAT IN TAX MATTERS THE LITERAL RULE OF INTERPRETATION APPLIES AND IT IS NOT OPEN TO THE CO URT TO EXTEND THE LANGUAGE OF A PROVISION IN THE ACT BY RELYING O N EQUITY, INFERENCE, ETC. IT IS THE FIRST PRINCIPLE OF INTERPRETATION THAT A STATUTE SHOULD BE READ IN ITS ORDINARY, NATURAL AND GRAMMATICAL SENSE AS OBSERVED BY THE SUPREME COURT OF INDIA: 'IN CONSTRUING A STATUTORY PROVISION THE FIRST AND FOREMOST RULE OF CONSTRUCTION IS THE LITERARY CONSTRUCTION. ALL T HAT THE COURT HAS TO SEE AT THE VERY OUTSET IS WHAT DOES THE PROV ISION SAY. IF THE PROVISION IS UNAMBIGUOUS AND IF FROM THE PROVIS ION THE LEGISLATIVE INTENT IS CLEAR, THE COURT NEED NOT CAL L INTO AID THE OTHER RULES OF CONSTRUCTION OF STATUTES. THE OTHER RULES OF CONSTRUCTION ARE CALLED INTO AID ONLY WHEN THE LEGI SLATIVE INTENT IS NOT CLEAR' VIDE HIRALAL RATANLAL V. STO, AIR 197 3 SC 1034;' 53. A DIVISION BENCH OF THE DELHI HIGH COURT ALSO I N AGRICULTURAL PRODUCE MARKET COMMITTEE V. CIT [2006] 156 ITR 286/ [2007] 294 ITR 549 HAD OCCASION TO CONSIDER SECTION 10(20) AS AMENDED W.E.F. ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 9 01.04.2003 WHERE THE HIGH COURT IN PARAGRAPH 8 HAS STATED THE FOLLOWING: '8. THE MOST STRIKING FEATURE OF THE EXPLANATION IS THAT THE SAME PROVIDES AN EXHAUSTIVE MEANING TO THE EXPRESSION 'L OCAL AUTHORITY'. THE WORD 'MEANS' USED IN THE EXPLANATIO N LEAVES NO SCOPE FOR ADDITION OF ANY OTHER ENTITY AS A 'LOCAL AUTHORITY' TO THOSE ENLISTED IN THE EXPLANATION. IN OTHER WORDS, EVEN IF AN ENTITY CONSTITUTES A 'LOCAL AUTHORITY' FOR PURPOSES OF THE GENERAL CLAUSES ACT, 1897 OR FOR PURPOSES OF ANY OTHER ENAC TMENT FOR THAT MATTER, IT WOULD NOT BE SO CONSTRUED FOR PURPO SES OF SECTION 10(20) OF THE ACT UNLESS IT ANSWERS THE DESCRIPTION OF ONE OF THOSE ENTITIES ENUMERATED IN THE EXPLANATION. MRS. AHLAWAT DID NOT MAKE ANY ATTEMPT TO BRING HER CASE UNDER CLAUSE S (I), (II) AND (IV) OF THE EXPLANATION AND IN OUR OPINION RIGH TLY SO BECAUSE THE APPELLANT COMMITTEE CANNOT BY ANY PROCESS OF RE ASONING BE CONSTRUED AS A PANCHAYAT AS REFERRED TO IN CLAUSE ( D) OF ART. 243 OF THE CONSTITUTION OF INDIA, A MUNICIPALITY IN TERMS OF CLAUSE (E) OF ART. 243P OF THE CONSTITUTION OF INDI A OR A CANTONMENT BOARD AS DEFINED UNDER SECTION 3 OF THE CANTONMENTS ACT, 1924. WHAT SHE ARGUED WAS THAT LOO KING TO THE NATURE OF THE FUNCTIONS ENJOINED UPON THE APPEL LANT COMMITTEE, IT MUST BE DEEMED TO BE A MUNICIPAL COMM ITTEE WITHIN THE MEANING OF THAT EXPRESSION IN CLAUSE (II I) OF THE EXPLANATION. WE REGRET OUR INABILITY TO ACCEPT THAT SUBMISSION. WE SAY SO FOR TWO DISTINCT REASONS. FIRSTLY BECAUSE THE EXPRESSION 'MUNICIPAL COMMITTEE' APPEARS IN A TAXIN G STATUTE AND MUST, THEREFORE, BE CONSTRUED STRICTLY. IT IS F AIRLY WELL- SETTLED BY A LONG LINE OF DECISIONS RENDERED BY THE SUPREME COURT THAT WHILE INTERPRETING A TAXING STATUTE, ONE HAS SIMPLY TO LOOK TO WHAT IS CLEARLY STATED THEREIN. THERE IS, I N FISCAL STATUTES, NO ROOM FOR ANY INTENDMENT NOR IS THERE A NY EQUITY ABOUT THE LEVY SANCTIONED UNDER THE SAME. THE FOLLO WING PASSAGE FROM CAPE BRANDY SYNDICATE V. IRC 1921 (1) KB 64 HAS BEEN APPROVED BY THE APEX COURT IN THE DECISION S RENDERED BY THEIR LORDSHIPS. 'IN A TAXING ACT ONE HAS TO LOOK MERELY AT WHAT IS CLEARLY SAID. THERE IS NO ROOM FOR ANY INTENDMENT. THERE IS NO EQ UITY ABOUT A TAX. THERE IS NO PRESUMPTION AS TO A TAX. NOTHING I S TO BE READ ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 10 IN, NOTHING IS TO BE IMPLIED, ONE CAN ONLY LOOK FAI RLY AT THE LANGUAGE USED.'' 54. WE FULLY ENDORSE THE VIEWS TAKEN BY THE HIGH CO URT IN THE ABOVE TWO JUDGMENTS. 55. NOW, REVERTING BACK TO EXPLANATION TO SECTION 1 0(20), THESE ARE ENTITIES WHICH MEAN THE LOCAL AUTHORITY. THE SUBMIS SION OF THE APPELLANT IS THAT THE APPELLANT IS COVERED BY CLAUS E (II) OF THE EXPLANATION I.E. 'MUNICIPALITY AS REFERRED TO IN CL AUSE (E) OF ARTICLE 243P OF THE CONSTITUTION'. WE, WHILE DISCUSSING ABO VE PROVISIONS, HAVE ALREADY HELD THAT THE APPELLANT IS NOT COVERED BY THE WORD/EXPRESSION OF 'MUNICIPALITY' IN CLAUSE (E) OF ARTICLE 243P. THUS, THE APPELLANT IS NOT CLEARLY INCLUDED IN SUB- CLAUSE (II) OF EXPLANATION. IT IS NOT EVEN THE CASE OF THE APPELLA NT THAT THE APPELLANT IS COVERED BY SECTION 10(20) EXCEPT CLAUS E (II). 10. CONSIDERING PRESENT LEGAL POSITION, INSOFAR AS DEFINITION OF, WHO WOULD CONSTITUTE AN AUTHORITY, IN OUR CONSIDE RED OPINION DECISION OF HONBLE ALLAHABAD HIGH COURT CANNOT BE APPLIED, DUE TO RATIO LAID DOWN BY HONBLE SUPREME COURT IN CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY VS CIT (SUPRA). 11. ACCORDINGLY, RESPECTFULLY FOLLOWING RATIO LAID DOWN BY HONBLE SUPREME COURT IN CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY VS CIT (SUPRA), WE HOLD THAT TDS NEEDS TO BE DEDUCTED ON INTEREST PAID TO YEIDA. (III) BANK GUARANTEE COMMISSION AMOUNTING TO RS.1, 13,06,210/- 12. IT IS OBSERVED THAT COORDINATE BENCH OF THIS TR IBUNAL (SUPRA) RELYING UPON DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. LIVING MEDIA INDIA LTD., ORDER DATED 06/05/08, HELD THAT, BANK GUARANTEE COMMISSION CANNOT BE SUBJECT TO WITH HOLDING OF TAX UNDER SECTION 194H OF THE ACT, AS IT DOES NOT F ALL INTO CLAUSE (I) OF EXPLANATION TO SECTION 194H AND FURTHER THAT ASSESSEE WAS ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 11 NOT ACTING AS AN AGENT BUT ON PRINCIPLE TO PRINCIPL E BASIS. FURTHER U/S 194A(2)(II)(A) THERE IS AN EXEMPTION PR OVIDED IN RESPECT OF ANY PAYMENT MADE TO ANY BANKING COMPANY TO WHICH ANY BANKING REGULATION APPLY. 12.1 WE AGREE WITH AFORESTATED VIEW. ASSESSEE IN PR ESENT CASE PAID COMMISSION TO BANK NOT AS AN AGENT. 12.2 ACCORDINGLY, WE HOLD THAT THERE WAS NO NEED TO DEDUCT TDS ON THE BANK GUARANTEE COMMISSION PAID BY ASSESSEE T O BANK. ACCORDINGLY THIS GROUND RAISED BY REVENUE STANDS AL LOWED PARTLY. 13. GROUND NO.2 IS REGARDING ADDITION OF RS.2,51,17,344/- BEING DELETED BY LD.CIT(A). 14. DURING ASSESSMENT PROCEEDINGS, LD.AO OBSERVED T HAT THERE IS DIFFERENCE IN AMOUNT OF TDS AS PER 26AS. UPON A QUERY BEING RAISED BY LD.AO, ASSESSEE REPLIED THAT IT HAD RECEI VED ADVANCE OF RS.2,51,19,000/- FROM FORMULA ONE MANAGEMENT LTD., TOWARDS HOTEL BOOKING HIRING OF CARS ETC., FOR GRAND PRIX IN INDIA, DURING YEAR UNDER CONSIDERATION IT WAS ALSO SUBMITTED THAT TDS AMOUNTING TO RS.25,11,900/- WAS DEDUCTED ON SUCH AD VANCE. LD.AO REJECTED SUBMISSION OF ASSESSEE AND HELD AMOU NT RECEIVED BY ASSESSEE AS INCOME OF ASSESSEE BEING ITS CONTRAC TUAL RECEIPTS, AND GRANTED CREDIT OF TDS OF RS.25,11,900/-. 15. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A), WHO DELETED ADDITION HOLDING THAT LD.AO WAS NOT JUSTIFIED IN TREATING ADVANCE RECEIVED OF RS.2, 51,17,344/- ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 12 FROM FORMULA ONE MANAGEMENT LTD., SINCE IT WAS RECE IVED FOR SPECIFIC PURPOSE OF BOOKING OF HOTEL AND DELETED AD DITION. 16. AGGRIEVED BY ORDER OF LD.CIT(A), REVENUE IS IN APPEAL BEFORE US NOW. THE LD. SR. DR RELIED UPON ORDER OF LD.AO AND SUBMI TTED THAT, WITHOUT VERIFYING THE NATURE OF INCOME OFFERED BY A SSESSEE, LD.CIT(A) DELETED THE ADDITION. 17. LD.AR RELIED UPON ORDER OF LD.CIT(A). 18. WE HAVE CAREFULLY CONSIDERED SUBMISSIONS ADVANC ED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 19. ON VERIFICATION OF FACTS, IT REVEALS THAT ASSES SEE RECEIVED RS.2,51,17,344/-, ON WHICH TDS OF RS.25,11,900/- HA S BEEN DEDUCTED. LD. CIT(A) WITHOUT VERIFYING ANY DETAILS DELETED ADDITION, BY HOLDING THAT NO INCOME AGAINST ADVANCE ACCRUED TO ASSESSEE. LD.CIT(A) ALSO FAILED TO NOTE THAT ADVAN CE HAS BEEN RECEIVED FOR SERVICES WHICH ARE TO BE RENDERED IN N EXT YEAR. IT IS THE FACT THAT ASSESSEE RECEIVED MONEY AND DID NOT O FFER TO TAX DURING THE YEAR UNDER CONSIDERATION, STATING THAT, IT IS ADVANCE RECEIVED. HOWEVER, LD.CIT(A) FAILED TO OBSERVE THAT ADVANCE RECEIVED, MUST HAVE CULMINATED IN SUBSEQUENT YEAR A S INCOME OF ASSESSEE. THEREFORE, IN OUR CONSIDERED OPINION, IT IS REQUIRED TO BE VERIFIED, IN WHICH YEAR, THE SAME INCOME AS BEEN OFFERED BY ASSESSEE FOR INCOME TAX PURPOSES. ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 13 20. WE, THEREFORE, SET ASIDE WHOLE ISSUE TO LD.AO, WITH A DIRECTION TO ASSESSEE TO PROVE BEFORE LD.AO TO VERI FY WHETHER THE SAME INCOME AS BEEN OFFERED FOR TAXATION IN SUBSEQU ENT YEAR. ACCORDINGLY, THIS GROUND RAISED BY REVENUE STANDS A LLOWED FOR STATISTICAL PROPOSES. IN THE RESULT APPEAL FILED BY REVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06/12/2018 SD/- SD/- (R.K.PANDA) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDIC IAL MEMBER DT. 06/12/2018 *GMV/*KAVITA ARORA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY OR DER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NO. 4027/DEL/2015 AY 2011-12 JAYPEE SPORTS INTERNATIONAL LTD. 14