ITO, New Delhi V. M/s. The Indian News Paper Society, New Delhi

ITA 4660/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74065 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 06-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: SANJEEV M SHAH
• Keywords: Maximum Marginal Rate; Capital expenditure
• Section: 201(1)

Judgement Text

ITA NO. 4660/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4660/DEL/2013 A.Y. : 2011-12 ITO, WARD 50(1), ROOM NO. 504, AAYAKAR BHAWAN, LAXMI NAGAR, NEW DELHI 110 092 VS. M/S INDIAN NEWS PAPER SOCIETY, INS BUILDING, RAFI MARG, NEW DELHI 110 001 (PAN: AAATI0416Q) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. SANJEEV M SHAH, ADVOCATE DEPARTMENT BY : SH. SAMEER SHARMA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XXX), NEW D ELHI DATED 02.5.2013 PERTAINING TO ASSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED READ AS UNDER:- I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIA TING THAT PAYMENT OF RS. 16,93,03,285/- MADE BY THE ASSESSEE TO M/S MUMBAI METROPOLITAN REGIONAL DEVELOPMENT AUTHORITY (MMRDA) IS COVERED UNDER THE DEFINITION OF RENT: AS PER PROVISIONS OF SECTION 194I OF THE I.T . ACT. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN NOT TREATING THE ITA NO. 4660/DEL/2013 2 ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTION 201(1) OF THE I.T. ACT FOR NON DEDUCTION OF THE TDS ON PAY MENT OF RS. 16,93,03,285/-. III) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR A MEND ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. AO IN THIS CASE HELD THAT THE TDS WAS REQUIRED T O BE DEDUCTED BY THE ASSESEE UNDER SECTION 194I OF THE I.T. ACT ON THE LEASE PREMIUM OF RS. 16,93,03,285/- PAID TO MMRDA TOWARDS ADDITIONAL PREMIUM FOR ADDITIONAL BUILT UP AREA. IN THIS REGAR D, AO REFERRED TO SIMILAR ADDITION MADE IN EARLIER ASSESSMENT YEAR. 3.1 AO FURTHER HELD THAT THE ASSESSEE COMPANY HAS FAILED TO DEDUCT THE TDS AS ABOVE FOR WHICH NO REASONABLE CAU SE COULD BE FURNISHED , THEREFORE, THE DEDUCTOR COMPANY WAS TRE ATED AS ASSESSEE IN DEFAULT UNDER SECTION 201(2) OF THE I.T . ACT. 4. UPON ASSESSEES APPEAL LD. CIT(A) FOLLOWING THE REASONING IN HIS TWO APPELLATE ORDERS IN ASSESSMENT YEAR 2008-09 AND 2010-11, HELD THAT HE WAS OF THE VIEW THAT THE IMPUGNED PA YMENT MADE FROM ANY ANGLE CANNOT BE DETERMINED AS RENT AS POST ULATED IN SECTION 194I AND HENCE HE HELD THAT THE ASSESSEE WA S NOT LIABLE TO DEDUCTION OF TAX AT SOURCE AND THUS CANNOT BE TREAT ED AS ASSESSEE IN DEFAULT UNDER SECTION 201 OF THE I.T. ACT. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED TH E RECORDS. LD. COUNSEL OF THE ASSESSEE AT THE OUT SET SUBMITTE D THAT THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 5207/DEL/2012 (A.Y. 2007-08) AND IN ITA NO. 5208/DE L/2012 FOR ITA NO. 4660/DEL/2013 3 ASSTT. YEAR 2009-10 VIDE ORDER DATED 20.6.2013. I N THE SAID ORDER THE TRIBUNAL HAD REFERRED TO THE CIT(A)S ORDER AN D AFFIRMED THE SAME BY HOLDING AS UNDER:- PARA 12. IN VIEW OF ABOVE OBSERVATIONS, WE CLEARLY OBSERVE THAT THE COMMISSIONER OF INCOME TAX(A) HAS ALSO DEALT WITH OTHER CASES PERTAINING TO THE LAND LEASE D BY MMRDA IN THE SAME OR ADJOINING AREA AND HAS HELD TH AT THE IMPUGNED DEPOSIT OF LEASE PREMIUM DOES NOT CONSTITUTE ADVANCE RENT BUT IT IS A LEASE PREMIUM F OR ACQUIRING LAND WITH RIGHT TO CONSTRUCT A COMMERCIAL BUILDING ALTHOUGH WITH CERTAIN RESTRICTIONS, BUT IT IS A CAPITAL EXPENDITURE NOT FALLING WITHIN THE AMBIT OF SECTION 194-I OF THE ACT. WE ALSO OBSERVE THAT THE PAYMENT OF LEASE PREMIUM WAS NOT TO BE MADE ON PERIODICAL ITA NO.5207 & 5208/DEL/2012. PARA 16. IN VIEW OF DISCUSSIONS MADE HEREINABOVE, W E ARE NOT IN AGREEMENT WITH THE FINDINGS OF THE ASSESSING OFFICER AND WE DECLINE TO HOLD THAT THE COMMISSIONE R OF INCOME TAX(A) HAS ERRED IN NOT TREATING THE ASSESSE E AS ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTION 2 01(1) OF THE INCOME TAX ACT FOR NON-DEDUCTION OF TDS ON PAYMENT OF LEASE PREMIUM TO MMRDA. AT THE COST OF REPETITION, IT IS WORTHWHILE TO MENTION THAT FOR IN VOKING THE PROVISIONS OF SECTION 201(1) OF THE ACT, THIS I S A PRE- CONDITION THAT THE PERSON SHOULD BE REQUIRED TO DED UCT ITA NO. 4660/DEL/2013 4 ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THIS A CT AND HE DOES NOT DEDUCT, OR DOES NOT PAY OR AFTER DEDUCT ION FAILS TO PAY THE WHOLE OR IN PART OF THE TAX AS REQ UIRED UNDER THE PROVISIONS OF THE ACT, THEN ONLY SUCH PER SON SHALL BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RES PECT OF PAYMENT OF SUCH TAX. IN THE CASE IN HAND, THE ASSESSEE WAS NOT LIABLE TO DEDUCT ANY TAX ON PAYMEN T OF LEASE PREMIUM TO MMRDA BECAUSE IT WAS CAPITAL EXPENDITURE TO ACQUIRE LAND ON LEASE WITH SUBSTANTI AL RIGHT TO CONSTRUCT A COMMERCIAL BUILDING COMPLEX. PARA 17. TO SUM UP, WE FINALLY HOLD THAT THE ASSESS EE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE PAYMENT MADE TO MMRDA AS LEASE PREMIUM, THEREFORE, THE COMMISSIONER OF INCOME TAX(A) RIGHTLY DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND WE HAVE NO REASON TO INTERFERE WITH THE FINDINGS OF THE COMMISSIONER OF INCOME TAX(A) IN THIS REGARD. ACCORDINGLY, GROUND NO. 3 O F ITA 5207/D/12 AND GROUND NO.2 OF ITA 5208/D/12 BEING DEVOID OF MERITS ARE DISMISSED. 7. LD. DR COULD NOT CONTROVERT THE ABOVE SUBMISSION S. THUS ON IDENTICAL FACTS IN PRECEDING YEAR TRIBUNAL HAS DEC IDED THE ISSUE IN ASSESSEES FAVOUR. RESPECTFULLY FOLLOWING THE PREC EDENT AS ABOVE, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DECIDE T HE ISSUE IN FAVOR OF THE ASSESSEE. ITA NO. 4660/DEL/2013 5 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/1/2014, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 27/1/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 4660/DEL/2013 6