ITO (TDS ) RG 2(2), MUMBAI V. MUMBAI METROPOLITAN REGIONAL DEVELOPEMTN AUTHORITY, MUMBAI

ITA 496/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92268 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-10-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 17-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S J SINGH
• Section: 194C; 201(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO S.496 TO 502/MUM/2013 ( / ASSESSMENT YEAR S : 2000 - 01 TO 2009 - 10 THE ITO ( TDS) - 2(2), SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG., CHARNI ROAD, MUMBAI - 400 002 / VS. M/S. MUMBAI METROPOLITAN REGIONAL DEVELOPMENT AUTHORITY, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400 051 ./ ./ PAN/GIR NO. : AAATM 7106R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI S.J. SINGH / RESPONDENT BY : SHRI J.P. BAIRAGRA / DATE OF HEARING : 01 . 0 4 .2015 / DATE OF PRONOUNCEMENT : 10 .0 4 .2015 / O R D E R PER BENCH : THESE SEVEN APPEALS BY THE REVENUE ARE FOR ASSESSMENT YEARS 2000 - 01 TO 2009 - 10 AND HAS COMMON GRIEVANCE FOR ASSESSMENT YEARS 2000 - 01 TO 2007 - 08. THE GRIEVANCE FOR A.YRS. 2008 - 09 AND 2009 - 10 ARE ALSO SIMILAR WITH SOME ADDITIONAL GRIEVANCE, THEREFORE THIS BUNCH OF APPE ALS HAVE BEEN HEARD TOGETHER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA. NO S . 496 TO 502/M/13 2 2. THE COMMON ISSUE FOR ASSESSMENT YEARS 2000 - 01 TO 2009 - 10 RELATES TO THE APPLICABILITY OR OTHERWISE OF THE PROVISIONS OF SEC. 194L/ 194 LA OF THE ACT. 3. THE IMPUGNED ORDER OF ASSESSMENT IS MADE U/S. 201(1)/201(1A) OF THE ACT. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT THERE HAS BEEN ACQUISITION OF IMMOVABLE PROPERTY FOR VARIOUS PROJECTS BY THE ASSESSEE FOR WHICH THE PROJECT AFFECTED PERSONS HAVE BEEN CO MPENSATED AS PER LAND ACQUISITION ACT OF 1894 AND SINCE THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE AS PER THE PROVISIONS OF SEC 194L/ 194 LA, THE AO TREATED THE ASSESSEE AS ASSESSEE IN DEFAULT AND COMPUTED THE DEMAND OF TAX U/S. 201(1) AND THAT OF INTEREST U/S. 201(1A) OF THE ACT. 4 . AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). IT WAS EXPLAINED TO THE LD. CIT(A) THAT THE ASSESSEE HAS ONLY IMPLEMENTED THE SCHEME OF RESETTLEMENT OF THE SQUATTERS/HUTMENTS WHO WERE COMING IN THE WAY OF ROAD WIDENING AND WITHIN THE SAFETY ZONE OF RAILWAY TRACKS WITHOUT ANY LEGAL OWNERSHIP OF THE LAND. IT WAS EXPLAINED THAT THESE SQUATTERS/HUTMENTS WERE NOT OWNERS OF THE LAND BUT ILLEGAL OCCUPANTS OF THE GOVERNMENT LAND THEREFORE IT CANNOT BE SAID THAT THE ASSE SSEE HAS ACQUIRED THE LAND AND PAID COMPENSATION TO THE SQUATTERS/HUTMENTS THEREFORE THERE IS NO QUESTION OF APPLICABILITY OF THE PROVISIONS OF SEC. 194L/194LA OF THE ACT. 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE TERMS OF AGREEMENT, T HE LD. CIT(A) WAS CONVINCED THAT THERE WAS NO PAYMENT OF COMPENSATION FOR ACQUISITION OF ANY LAND OR IMMOVABLE PROPERTY AND ITA. NO S . 496 TO 502/M/13 3 ACCORDINGLY DELETED THE DEMAND RAISED BY THE AO U/S. 201(1)/201(1A) OF THE ACT. 5. THE SECOND ISSUE WHICH IS COMMON FOR A.YRS 2008 - 09 AND 2009 - 10 ONLY RELATES TO THE APPLICATION OF SEC. 194J OR 194C OF THE ACT WHERE THE ASSESSEE HAS DEDUCTED TAX AT SOURCE U/S. 194C OF THE ACT AND THE AO WAS OF THE OPINION THAT TAX SHOULD HAVE BEEN DEDUCTED AT SOURCE AS PER THE PROVISIONS OF SEC. 194J OF THE ACT. THE AO HAS LEVIED INTEREST U/S. 201(1A) OF THE ACT WHICH HAS BEEN DELETED BY THE LD. CIT(A). 5.1. WHILE SCRUTINIZING THE RETURN, THE AO NOTICED THAT THE ASSESSEE HAS MADE PAYMENT TOWARDS ANNUAL MAINTENANCE CONTRACT OF AC AND LIFT ON WHICH TDS HAS BEEN MADE U/S. 194C OF THE ACT WHEREAS THE AO WAS OF THE OPINION THAT THESE SERVICES FALL UNDER THE CATEGORY OF TECHNICAL SERVICES SUBJECT TO TDS U/S. 194J OF THE ACT AND SINCE THE ASSESSEE HAS DEDUCTED TAX U/S. 194C, THE AO PROCEEDED BY LEVYING LI ABILITY U/S. 201(1) OF THE ACT AT RS. 73,79,004/ - AND ALSO LIABLE FOR INTEREST U/S. 201(1A) OF THE ACT AT RS. 32,46,761/ - . 6. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). AFTER CONSIDERING THE FACTS AND THE SUBMISSION, THE LD. CIT(A) OBSERVED T HAT ANNUAL MAINTENANCE CONTRACTS ARE CONTRACTS FOR PERIODICAL INSPECTION AND ROUTINE MAINTENANCE WORK ALONGWITH SUPPLY OF SPARE PARTS. THE LD. CIT(A) WAS OF THE FIRM BELIEF THAT SUCH SERVICES DO NOT CONSTITUTE TECHNICAL SERVICES. FURTHER, THE REPAIRS OF GADGETS LIKE ACS AND LIFTS ARE ALSO IN THE NATURE OF NORMAL REPAIRS. TO SUPPORT HIS VIEWS, THE LD. CIT(A) DREW SUPPORT FROM THE DECISION OF THE TRIBUNAL AHMEDABAD BENCH IN THE CASE OF GUJARAT STATE ELECTRICITY CORPN. LTD. VS ITO 3 SOT 468 AND ALSO ON THE DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF NUCLEAR POWER CORPN. LTD IN ITA NOS 3059 TO 3061 & 3081/AHD/2009 ITA. NO S . 496 TO 502/M/13 4 AND DELETED THE DEMANDS OF TAX U/S. 201(1) AND OF INTEREST U/S. 201(1A) OF THE ACT. 7. AGGRIEVED BY THESE TWO DECISIONS OF THE LD. CIT(A) ON TH E ABOVE MENTIONED TWO ISSUES, THE REVENUE IS IN APPEAL BEFORE US. 8. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE AO. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ALSO BEFORE THE FIRST APPELLATE AUTHORITY. 10. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I N SO FAR AS THE FIRST ISSUE OF PAYMENT OF COMPENSATION VIS - - VIS TDS U/S. 194L/194LA OF THE ACT IS CONCERNED, THE FACTS ON THE RECORD SHOW THAT TO IMPLEMENT THE SCHEME OF THE GOVERNMENT RELATING TO THE ROAD WIDENING NEAR THE RAILWAY TRAC K S, THE ASSESSEE EVACUAT E D THE ILLEGAL/UNAUTHORIZED PERSONS IN THE FORM OF SQUATTERS/HUTMENTS FOR WHICH THE ASSESSEE PAID CERTAIN COMPENSATION TO THESE PERSONS. THE FACT OF THE MATTER IS THAT THESE OCCUPANTS WERE UNAUTHORISED AND ILLEGAL, THEY WERE NOT THE REAL OWNERS OF THE LAN D , THEREFORE, THERE IS NO QUESTION OF ACQUIRING THE LAND. THE LAND ALWAYS BELONG ED TO THE STATE. IT WAS ONLY THE ENCUMBRANCE WHICH WAS REMOVED BY THE ASSESSEE BY MAKING PAYMENT OF CERTAIN COMPENSATION. THEREFORE, WE AGREE WITH THE LD. CIT(A) THAT PROVIS IONS OF SEC. 194L/194LA DO NOT APPLY ON THE FACTS OF THE CASE. WE CONFIRM THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. THE APPEAL FILED BY THE REVENUE ON THIS ISSUE IS ACCORDINGLY DISMISSED. ITA. NO S . 496 TO 502/M/13 5 11. THE SECOND ISSUE RELATE TO A.YRS 2008 - 09 AND 2009 - 10 WHE REIN THE AO HAS APPLIED THE PROVISIONS OF SEC. 194J WHEREAS THE ASSESSEE HAS DEDUCTED TAX U/S. 194C OF THE ACT. WE FIND THAT THE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE ONLY IN RESPECT OF ANNUAL MAINTENANCE CONTRACT WHICH RELATES TO MINOR REPAIRS, REPLACE MENT OF SOME SPARE PARTS, OILING AND GREASING OF THE MACHINERIES. IN OUR UNDERSTANDING OF THE FACT, THESE SERVICES DO NOT REQUIRE ANY TECHNICAL EXPERTISE AND THEREFORE CANNOT BE CATEGORIZED UNDER THE HEAD TECHNICAL SERVICES. WE, THEREFORE, DECLINE TO I NTERFERE WITH THE FINDINGS OF THE LD. CIT(A). THE APPEAL FILED BY THE REVENUE FOR THIS ISSUE IS ALSO DISMISSED. 12. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. OR DER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL , 2015 SD/ - SD/ - ( JOGINDER SINGH ) (N.K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 10 TH APRIL , 2015 . . ./ RJ , SR. PS / 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) , / ITAT, MUMBAI