ITO (TDS) LTU, MUMBAI V. IDBI BANK LTD, MUMBAI

ITA 4737/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84282 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 24-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SACCHIDANAND DUBEY
• Assessee Lawyers: SATHIS R MODI
• Keywords: Maximum Marginal Rate; Additional evidence; Capital expenditure
• Section: 37(1); 201(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . . , . , ! BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.4737/MUM/2013 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2008-09 ITO (TDS), LTU, 29 TH FLOOR, W.T.C.1, CUFFE PARADE, MUMBAI 400 005 ' ' ' ' / VS. M/S. IDBI BANK LTD., 5 TH FLOOR, IDBI TOWER, WTC COMPLEX, CUFFE PARADE, MUMBAI 400 005. $ ./ % ./ PAN/GIR NO. : AABCI 8842G ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) APPELLANT BY: SHRI N. SACCHIDANAND DUBEY RESPONDENT BY : SHRI SATHIS R. MODI ' ) *+ / DATE OF HEARING : 24/11/2014 ,-# ) *+ / DATE OF PRONOUNCEMENT : 24/11/2014 . / O R D E R PER I.P.BANSAL,J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS D IRECTED AGAINST ORDER PASSED BY LD. CIT(A)LTU DATED 06/03/2013 FOR ASSESS MENT YEAR 2008-09. GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS.1,73,58,374/ - PAID BY THE ASSESSEE TO MMRDA WAS NOT IN THE NATURE OF RENT AS CONTEMPLATED IN SECTION 194 I OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ALSO ERRED IN HOLDING THAT THE ASSESSEE WAS NOT AS SESSEE IN DEFAULT IN TERMS OF SECTION 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1 961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE OF ASSESSEE WITHOUT GIVING OPPORTUNITY TO A.O. IN CONTRAVENTION TO RULE 46 A OF THE INCOME TA X RULE. 1962. ./ I.T.A. NO.4737/MUM/2013 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2008-09 2 2. THE ASSESSEE WAS ALLOTTED PLOT NO.C-7 OF THE AR EA MEASURING 9294.78 SQ. METERS WITH A PERMISSIBLE BUILT-UP AREA OF 18,589.5 6 SQ.MTRS. IN G-BLOCK OF BANDRA KURLA COMPLEX, MUMBAI SUB-URBAN DISTRICT ON LEASE. DURING THE FINANCIAL YEAR THE ASSESSEE HAS PAID A SUM OF RS.1, 73,58,374/- TO MMRDA FOR SANCTION OF ADDITIONAL BASEMENT AREA IN RESPECT OF COMMERCIAL BUILDING OF IDBI BANK LTD. THE ASSESSEE DID NOT DEDUCT TDS ON THIS AMOUNT. THE AO INVOKED SECTION 194-I AND THE ASSESSEE WAS CONSIDERED TO BE IN DEFAULT OF TDS PAYMENT AMOUNTING TO RS.39,33,408/- AND INTEREST UNDER SECT ION 201(IA) OF RS.78,01,268/-. ACCORDINGLY, THE DEMAND OF RS.1,1 7,44,676/- WAS RAISED. LD. CIT(A) HAS DELETED THE DEMAND, HENCE HAS FILED AFOR EMENTIONED GROUNDS OF APPEAL FOR ASSAILING DELETION. 3. AT THE OUTSET IT WAS SUBMITTED BY LD. AR THAT TH IS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY SEVERAL DECISION OF THE T RIBUNAL AND REFERENCE WAS MADE TO THE FOLLOWING DECISIONS: 1. ITO VS. RELIANCE INDUSTRIES, ITA NO.1910 & 19 98/MUM/2012, A.Y. 2008-09 ORDER DATED 12/03/201 4 . 2. ITO (TDS) 3(5) VS. M/S.WADHWA & ASSOCIATES RE ALTORS PVT. LTD. ITA NO.695/MUM/2012, A.Y. 2008-09 ORD ER DATED 03/07/2013 3. ITO VS. PARINEE DEVELOPERS , ITA NO.1734 & 447 5/MUM/2012, C.O. NO.06/M/2013 A.Y. 2008-09 & 2010-11 ORDER DATE D 26/09/2013. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY AO. 5. AFTER HEARING BOTH THE PARTIES WE FOUND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFOREMENTIONED DECISION OF T HE TRIBUNAL. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE. ACCORDINGLY, F OLLOWING THE AFOREMENTIONED DECISIONS WE DECLINE TO INTERFERE IN THE RELIEF GRA NTED BY LD. CIT(A). FOR THE SAKE OF COMPLETENESS THE RELEVANT PORTION OF THE AFOREME NTIONED ORDER OF THE TRIBUNAL ./ I.T.A. NO.4737/MUM/2013 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2008-09 3 IN THE CASE OF ITO VS. M/S. PARINEE DEVELOPERS PVT . LTD. (SUPRA) IS REPRODUCED BELOW: 4. AFTER HEARING BOTH PARTIES WE FOUND THAT THE ISSUE IS COVERED BY THE AFOREMENTIONED DECISION OF ITAT. FOR THE SAKE OF C OMPLETENESS THE RELEVANT PORTION OF ORDER PASSED IN THE CASE OF ITO VS. M/ S.WADHAWA & ASSOCIATES REALTORS PVT. LTD.(SUPRA) IS AS UNDER: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE ORDER OF THE LOWER AUTHORITIES AND THE MATERIAL EVIDENCE BROUGHT ON RECORD IN THE FORM OF PAPER BOOK AND THE JUDICIAL DECISIONS RELIED UPON B Y THE RIVAL PARTIES. THE ENTIRE GRIEVANCE REVOLVES AROUND THE PREMIUM PAID B Y THE ASSESSEE TO M/S. MMRDA LTD. FOR THE LEASEHOLD RIGHTS ACQUIRED BY THE ASSESSEE THROUGH THE LEASE DEED DT. 22 ND NOVEMBER, 2004. IT IS THE SAY OF THE REVENUE THAT THIS LEASE PREMIUM WAS LIABLE FOR DEDUCTION OF TAX AT SO URCE FAILING WHICH THE ASSESSEE IS TO BE TREATED AS ASSESSEE IN DEFAULT. IT IS THE SAY OF THE ASSESSEE THAT SUCH LEASE PREMIUM IS IN THE NATURE O F CAPITAL EXPENDITURE AND THEREFORE THERE IS NO QUESTION OF DEDUCTION OF TAX AT SOURCE. FURTHER, THE SAID LEASE PREMIUM DOES NOT COME WITHIN THE PURVIEW OF T HE DEFINITION OF RENT AS PROVIDED U/S. 194-1 OF THE ACT. 10. WE HAVE CAREFULLY PERUSED THE LEASE DEED AS EXH IBITED FROM PAGE-1 TO 42 OF THE PAPER BOOK. A CAREFUL READING OF THE SAI D LEASE DEED TRANSPIRES THAT THE PREMIUM IS NOT PAID UNDER A LEASE BUT IS P AID AS A PRICE FOR OBTAINING THE LEASE, HENCE IT PRECEDES THE GRANT OF LEASE. THEREFORE, BY ANY STRETCH OF IMAGINATION, IT CANNOT BE EQUATED WITH T HE RENT WHICH IS PAID PERIODICALLY. A PERUSAL OF THE RECORDS FURTHER SHO W THAT THE PAYMENT TO MMRD IS ALSO FOR ADDITIONAL BUILT UP ARE AND ALSO F OR GRANTING FREE OF FSI AREA, SUCH PAYMENT CANNOT BE EQUATED TO RENT. IT I S ALSO SEEN THAT THE MMRD IN EXERCISE OF POWER U/S. 43 R.W. SEC. 37(1) OF T HE MAHARASHTRA TOWN PLANNING ACT 1966, MRTP ACT AND OTHER POWERS ENABL ING THE SAME HAS APPROVED THE PROPOSAL TO MODIFY REGULATION 4A(II) A ND THEREBY INCREASED THE FSI OF THE ENTIRE G BLOCK OF BKC. THE DEVELOPMEN T CONTROL REGULATIONS FOR BKC SPECIFY THE PERMISSIBLE FSI. PURSUANT TO SUCH PROVISIONS, THE ASSESSEE BECAME ENTITLED FOR ADDITIONAL FSI AND HAS FURTHER ACQUIRED/PURCHASED THE ADDITIONAL BUILT UP AREA FOR CONSTRUCTION OF ADDITI ONAL AREA ON THE AFORESAID PLOT. THUS THE ASSESSEE HAS MADE PAYMENT TO MMRD UNDER DEVELOPMENT CONTROL FOR ACQUIRING LEASEHOLD LAND AND ADDITIONA L BUILT UP AREA. THE DECISIONS OF THE TRIBUNAL IN THE CASE OF M/S. NATIO NAL STOCK EXCHANGE (SUPRA) AND MUKUND LTD (SUPRA) HAVE BEEN WELL DISCUSSED BY THE LD. CIT(A) IS HIS ORDER. THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KHIMLINE PUMPS LTD. (SUPRA) SQUARELY AND DIRECTLY APPLY ON THE FACTS OF THE CASE WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT PAYMENT FOR ACQUIRING LEASEHOLD LAND IS A CAPITAL EXPENDITU RE. CONSIDERING THE ENTIRE FACTS IN TOTALITY IN THE LIGHT OF THE JUDICIAL DECI SIONS VIS--VIS PROVISIONS OF SEC. 194-1, DEFINITION OF RENT AS PROVIDED UNDER THE SAI D PROVISION, WE DO NOT FIND ANY REASON TO TAMPER OR INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) WHICH WE CONFIRM. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. C.O. NO. 06/MUM/2013 ./ I.T.A. NO.4737/MUM/2013 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2008-09 4 13. AS WE HAVE DECIDED THAT THE ASSESSEE IS NOT LIA BLE TO DEDUCT TAX AT SOURCE IN REVENUES APPEAL IN ITA NO. 695/M/2012, T HE CROSS OBJECTION RAISED BY THE ASSESSEE BECOME OTIOSE. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. 4.1 IT MAY BE MENTIONED HERE THAT LD. DR DID NOT DI SPUTE THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE SIMILAR TO TH E FACTS AND CIRCUMSTANCES OF CASES REFERRED TO BY LD. AR. 4.2 ACCORDINGLY, RESPECTFULLY FOLLOWING THE AFOREME NTIONED DECISION WE DISMISS THE DEPARTMENTAL APPEALS AND CROSS OBJECTIONS OF TH E ASSESSEE HAVING BECOME INFRUCTIOUS ARE ALSO DISMISSED IN VIEW OF THE DISM ISSAL OF DEPARTMENTAL APPEALS. 5. IN THE RESULT, THE APPEALS AS WELL AS CROSS OBJE CTIONS ARE DISMISSED. ACCORDINGLY, DEPARTMENTAL APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/11/2014 . . ) ,-# / 0'1 24/11//2014 - ) 2 SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 0' DATED 24/11/2014 . . . . ) )) ) '*3 '*3 '*3 '*3 43#* 43#* 43#* 43#* / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 5 ( ) / THE CIT(A)- 4. 5 / CIT 5. 362 '*' , , / DR, ITAT, MUMBAI 6. 27 8 / GUARD FILE. .' .' .' .' / BY ORDER, (3* '* //TRUE COPY// 9 99 9 / : : : : (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . .VM , SR. PS