DCIT (TDS) 1(1), MUMBAI V. BHARAT PETROLEUM CORPORATION LTD, MUMBAI

ITA 4985/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83962 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ABHA KALA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , . . , ! BEFORE SHRI JOGINDER SINGH, JM AND SHRI N. K. BILL AIYA, AM ' #$ ./ I.T.A. NO. 4985/MUM/2013 ( / ASSESSMENT YEAR: 2010-11) DY. CIT (TDS)-1(1), ROOM NO. 804, K. G. MITTAL HOSPITAL BLDG., CHARNI ROAD, MUMBAI-400 002 / VS. BHARAT PETROLEUM CORPORATION LTD., BHARAT BHAVAN-II, 4 & 6 CURRIMBHOY ROAD, BALLARD ESTATE, MUMBAI-400 001 & ./''' ./PAN/GIR NO. AAACB 2902 M ( #$&( /APPELLANT ) : ( )*&( / RESPONDENT ) #$&( + , / APPELLANT BY : SHRI ABHA KALA )*&( + , / RESPONDENT BY : SHRI J. D. MISTRY - ./ + 0 1 / DATE OF HEARING : 29.10.2014 234 + 0 1 / DATE OF PRONOUNCEMENT : 29.10.2014 '5 / O R D E R PER N. K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A)-14, MUMBAI DATED 18.03.2013 PERTAINING TO ASSESSMENT YE AR (A.Y.) 2010-11. 2. ALTHOUGH THE REVENUE HAS RAISED AS MANY AS FOURT EEN GROUNDS IN ALL, THE SOLITARY ISSUE ARISING IS WHETHER THE ASSESSEE IS REQUIRED T O DEDUCT THE TAX AT SOURCE FROM THE PAYMENT OF LEASE PREMIUM MADE TO CITY INDUSTRIAL DE VELOPMENT CORPORATION (CIDCO) U/S.194I OF THE ACT. IT IS THE CLAIM OF THE REVENUE THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT BHARAT PETROLEUM CORPO RATION LTD. (ASSESSEE) WAS NOT REQUIRED TO DEDUCT THE TAX AT SOURCE U/S.194I OF TH E ACT. 2 ITA NO. 4985/MUM/2013 (A.Y. 2010-11) DY. CIT (TDS) VS. BHARAT PETROLEUM CORPORATION LTD. 3. A SURVEY OPERATION U/S.133A WAS CARRIED OUT BY T HE TDS-WING, MUMBAI ON THE OFFICE PREMISES OF CIDCO. DURING THE COURSE OF SURV EY PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE-COMPANY HAD PAID THE LEASE PREMIUM TO CIDC O IN ORDER TO ACQUIRE THE LAND FROM CIDCO ON LEASE BASIS IN NEW MUMBAI AREA. IT WA S FOUND THAT NO TAX WAS DEDUCTED AT SOURCE ON SUCH PAYMENT. THE A.O. WAS OF THE FIRM BELIEF THAT THE ASSESSEE WAS LIABLE TO DEDUCT THE TAX AT SOURCE ON LEASE PREMIUM PAID UNDE R THE PROVISIONS OF SECTION 194I OF THE ACT. 4. THE ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE FOR NON-DEDUCTION OF TDS U/S.194I AND WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE FIL ED A DETAILED REPLY CLAIMING THAT THE PAYMENT OF PREMIUM TO CIDCO IS NOT RENT WITHIN THE MEANING OF SECTION 194I OF THE ACT, BUT IS A CAPITAL PAYMENT FOR ACQUISITION OF THE INT EREST OF CIDCO IN THE PLOTS OF LAND. THE SECOND CONTENTION OF THE ASSESSEE WAS THAT CIDCO IS EXEMPTED FROM TDS UNDER THE PROVISIONS OF SECTION 196 OF THE ACT. 5. THE A.O. OBSERVED THAT THE EXPLANATION OF THE AS SESSEE IS BEREFT OF ANY MERIT AND CONTRARY TO THE LEGAL PROVISIONS AS CONTAINED IN SE CTION 194I OF THE ACT. THE A.O. CONCLUDED BY TREATING THE ASSESSEE AS THE ASSESSEE IN DEFAULT U/S.201(1) OF THE ACT AND COMPUTED THE TOTAL LIABILITY WITH INTEREST U/S.201( 1A) OF THE ACT AT RS.9,90,33,546/-. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CLAIM. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS FURNISHED BY THE ASSESSEE, THE LD. CIT(A) WAS CONVINCED THAT THE LEASE PREMIUM IN RESPECT OF LEAS E PLOTS PAID BY THE ASSESSEE IS NOT IN THE NATURE OF RENT AS CONTEMPLATED U/S.194I OF THE ACT AND DELETED THE DEMAND OF TAX AND CONSEQUENTIALLY DELETED THE LEVY OF INTEREST. AGGRI EVED BY THIS THE REVENUE IS BEFORE US. 6. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE STATED THAT THE ISSUES INVOLVED IN THE APPEAL ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE TRIBUNAL IN SEVERAL CASES. IN SUPPORT, THE LD. COUN SEL FILED A PAPER BOOK OF CASE LAWS CONTAINING AS MANY AS EIGHT DECISIONS. PER CONTRA , THE LD. DR COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 3 ITA NO. 4985/MUM/2013 (A.Y. 2010-11) DY. CIT (TDS) VS. BHARAT PETROLEUM CORPORATION LTD. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE DECISIONS OF THE TRIBUNAL BROUGHT TO OUR NOTICE. ON IDENTICAL SE T OF FACTS, THE TRIBUNAL MUMBAI BENCH IN THE CASE OF M/S. WADHWA & ASSOCIATES REALTORS PVT. LTD. IN ITA NO. 695/MUM/2012 AND CO NO. 06/MUM/2013 HAD THE OCCASION OF CONSIDER ING SIMILAR ISSUE AND DECIDED IN FAVOUR OF THE ASSESSEE BY RELYING UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KHIMLINE PUMPS LTD . [2002] 258 ITR 459 (BOM). AS THE FACTS OF THE CASE IN HAND ARE IDENTICAL TO THE FAC TS OF THE CASE REFERRED TO HEREINABOVE, RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO-ORDIN ATE BENCH OF THE TRIBUNAL AND DRAWING SUPPORT FROM THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT (SUPRA), THE APPEAL FILED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . $6 407 . + #$ 6 + 0 ! ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 29 TH , 2014 SD/- SD/- (JOGINDER SINGH) (N. K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER - / MUMBAI; 8 DATED : 29.10.2014 ... ./ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. #$&( / THE APPELLANT 2. )*&( / THE RESPONDENT 3. ' ' - 90 ( #$ ) / THE CIT(A) 4. ' ' - 90 / CIT - CONCERNED 5. <.= )0> , ' #$1 #> 4 , - / / DR, ITAT, MUMBAI 6. ?@ A/ / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , - / / ITAT, MUMBAI