ACIT, CIRCLE- 78(1), NEW DELHI V. UNITECH LTD., NEW DELHI

ITA 4560/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0662 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 10-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: TDS
• Section: 133A; 201; 194A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER I.T.A. NO.4559 & 4560/DEL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 ACIT, CIRCLE-78(1), NEW DELHI. VS. M/S. UNITECH LTD., 6, COMMUNITY CENTRE, SAKET, NEW DELHI. TAN/PAN: AAACU 1482H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.S. RANA, CIT-DR RESPONDENT BY: MS. KANIKA JAIN, ADV. DATE OF HEARING: 23 09 2019 DATE OF PRONOUNCEMENT: 20 12 2019 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASSESS EE AGAINST SEPARATE IMPUGNED ORDER OF EVEN DATE 27.04. 2017, PASSED BY LD. CIT(APPEALS)-XLI, NEW DELHI IN RELATI ON TO ORDER PASSED U/S.201(1)/201(1A) FOR THE ASSESSMENT YEAR 2 012-13 AND 2013-14. THE ISSUES INVOLVED IN BOTH THE APPEAL S ARE COMMON ARISING OUT OF IDENTICAL SET OF FACTS, THERE FORE, SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WA Y OF THIS CONSOLIDATED ORDER. GROUNDS IN BOTH THE APPEALS ARE COMMON, THEREFORE, FOR THE SAKE OF BREVITY GROUNDS RAISED B Y THE REVENUE IN ITA NO.4560/DEL/2017 ARE REPRODUCED HERE IN BELOW. I.T.AS. NO.4559 & 4560/DEL/2017 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN HOLDING THA T THE NOIDA IS COVERED UNDER THE EXEMPTION FROM TDS IN VIEW OF PRO VISIONS OF SECTION 194A(3)(III)(F) READ WITH NOTIFICATION NO. 3489 DATED 20.10.1970, AND IGNORING THE HON'BLE ALLAHABAD HIGH COURT'S DECISION DATED 28/02/2011 IN WRIT PETITION NO 1338/ 2005 IN THE CASE OF NOIDA WHEREIN IT HAS BEEN HELD THAT NOIDA I S NOT A LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 10(20 OF TH E INCOME TAX ACT, 1961 HENCE, NOT ELIGIBLE FOR EXEMPTION FROM TD S U/S 194A(3)(III)(F) OF THE INCOME TAX ACT, 1961 ? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT (A) WAS JUSTIFIED IN PLACING RE LIANCE ON THE JURISDICTIONAL HIGH COURTS DECISION DATED 16.02.20 17 IN THE CASE OF M/S RAJESH PROJECTS INDIA PVT. LTD., WHICH IS APPARENTLY NOT ONLY IN CONTRADICTION OF THE JUDGEMENT OF THE H ON'BLE ALLAHABAD HIGH COURT IN WRIT PETITION NO 1338/2005 DATED 28.02.2011 BUT ALSO THE DECISION OF THE HON'BLE SUP REME COURT IN ADITYAPUR AREA DEVELOPMENT AUTHORITY VS. UOI & O THERS 283 ITR 97? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O N THE CASE AND IN LAW, THE CIT (A) WAS JUSTIFIED IN HOLDING TH AT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE ON PAYMENT O N INTEREST TO NOIDA ? 4. THAT THE ORDER OF THE CIT (A) BEING ERRONEOUS I N LAW AND ON FACTS IN RESPECT OF INTEREST TO NOIDA NEEDS TO BE V ACATED AND THE ORDER OF THE ACIT BE RESTORED. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN THE REAL ESTATE BUSINESS AND THE COMPANY WAS ALLOTTED PLOTS BY NOIDA I.T.AS. NO.4559 & 4560/DEL/2017 3 FOR GROUP HOUSING. DURING THE COURSE OF SURVEY U/S. 133A CARRIED OUT AT THE BUSINESS PREMISE OF THE ASSESSEE , IT WAS FOUND THAT ASSESSEE-COMPANY HAD PAID INTEREST OF RS.1,31,83,95,322/- TO NOIDA ON WHICH IT HAD NOT DE DUCTED TAX AT SOURCE. THE ASSESSING OFFICERS CASE WAS THA T THE AMOUNT OF INTEREST PAID TO NOIDA SHOULD HAVE BEEN S UBJECTED TO TDS U/S.194A AND ACCORDINGLY, HE HAS RAISED THE DEMAND OF PAYMENT OF RS.9,91,26,920/- IN THE ASSESSMENT YE AR 2011- 13 AND RS.13,18,39,540/- IN THE ASSESSMENT YEAR 201 2-13. 3. LD. CIT (A) FOLLOWING THE DECISION OF ITAT DELHI BENCH IN THE CASE OF ADDITIONAL CIT (TDS) VS. CANARA BANK OR DER DATED 07.08.2015 AND JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF RAJESH PROJECTS (INDIA) PVT. LTD. VS. CIT ( TDS)_II, (2017) 78 TAXMANN.COM 263 (DELHI) HELD THAT ASSESSE E IS NOT LIABLE TO DEDUCT TDS, BECAUSE SAME IS COVERED BY TH E EXEMPTION U/S.194A(3)(F). 4. IT HAS BEEN POINTED OUT BY THE LD. COUNSEL THAT NOW THIS ISSUE STANDS COVERED BY THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF CIT (TDS) VS. CANARA BANK, REPORTED IN (2018) 406 ITR 161 (SC) WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT NOIDA IS A CORPORATION ESTABLISHED BY A STATE ACT AND IS THEREFORE ENTITLED TO EXEMPTION OF PAYME NT OF TAX AT SOURCE U/S. 194A(1). 5. ON THE OTHER HAND, LD. CIT-DR SUBMITTED THAT HON BLE APEX COURT IN THE CASE OF NOIDA VS. CCIT REPORTED I N (2019) 406 ITR 178 (SC) HAS HELD THAT NOIDA IS NOT A LOCAL AUTHORITY I.T.AS. NO.4559 & 4560/DEL/2017 4 WITHIN THE MEANING OF SECTION 10(20), THEREFORE ALL THE PROVISIONS OF ACT SHALL APPLY. 6. AFTER PERUSING THE IMPUGNED ORDER, WE FIND THAT ONLY ISSUE ON WHICH DEMAND HAS BEEN CREATED U/S. 201(1)/ 201(1A) IS THAT ASSESSEE HAS NOT DEDUCTED TDS ON THE INTERE ST PAYMENT TO NOIDA U/S. 194A (1). IN SO FAR AS INTERE ST PAYMENT TO NOIDA, THIS ISSUE NOW STANDS SQUARELY CO VERED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT (TDS) VS. CANARA BANK (SUPRA) WHEREIN THEIR LORDSHI PS AFTER DETAILED ANALYSIS OF SECTION 194A HAVE HELD THAT, INTEREST OTHER THAN INTEREST AND SECURITIES PAID TO NOIDA ESTABL ISHED BY UTTAR PRADESH INDUSTRIES DEVELOPMENT ACT, 1976 IS C OVERED BY NOTIFICATION DATED 22.10.1970, AND THEREFORE, IT IS ENTITLED TO EXEMPTION OF TAX AT SOURCE U/S. 194A(1). SIMILARLY, IN JUDGMENT OF HONBLE APEX COURT HAS BEEN RELIED UPON BY THE LD. CIT-DR IN THE CASE OF NOIDA VS. CCIT (SUPRA) HAS HELD THAT NOIDA IS ENTITLED FOR BENEFIT OF SECTION 194A( 3)(III)(F). 7. IN VIEW OF THE AFORESAID LAW LAID DOWN BY THE HO NBLE SUPREME COURT, WE DO NOT FIND ANY SUBSTANCE IN THE GROUNDS RAISED BY THE REVENUE AND THE SAME ARE HEREBY DISMI SSED. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2019. SD/- SD/- [B.R.R. KUMAR [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 20 TH DECEMBER, 2019