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

ITA 7515/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92922 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 23-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACCHIDANAND DUBEY
• Assessee Lawyers: SATISH R MODI
• Keywords: Maximum Marginal Rate
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' I ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA , ACCOUNTANT MEMBER ITA NO. 7515/MUM/2013 (ASSESSMENT YEAR: 2010 - 11 ) INCOME TAX OFFICER (TDS) LTU VS. M/S. IDBI BANK LTD. 29TH FLOOR, WORLD TRADE CENTRE CUFFE PARADE, MUMBAI 400005 IDBI TOWER, WORLD TRADE CENTRE CURRE PARADE, MUMBAI 400005 PAN - AABCI8842G APPELLANT RESPONDENT APPELLANT BY: SHRI SACCHIDANAND DUBEY RESPONDENT BY: SHRI SATISH R. MODI DATE OF HEARING: 17.06. 2015 DATE OF PRONOUNCEMENT: 17.06.2015 O R D E R PER D. MANMOHAN, V.P. THIS IS AN APPEAL FILED AT THE INSTANCE OF THE REVENUE AND IT PERTAIN S TO A.Y. 2010 - 11. 2. FOLLOWING GROUNDS WERE URGED BEFORE US: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S. 201(1) & 201(1A) OF THE ACT FOR NOT DEDUCTING THE TDS U/S. 194 I ON THE AMOUNT OF RS.6,36,67,500/ - PAID BY ASSESSEE TO MMRDA WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. THE APPELLA NT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. FACTS OF THE CASE IN SHORT ARE THAT THE ASSESSEE BANK PAID A SUM OF ` 6,36,67,500/ - AS LEASE PREMIUM FOR ACQUIRING ADDITIONAL BUILT UP AR EA FOR CONSTRUCTING COMMERCIAL BUILDING ON A PLOT OF LAND AVAILABLE AT BANDRA KURLA COMPLEX, WHICH IN TURN WAS TAKEN ON LEASE FROM MMRDA. ASSESSEE DID NOT DEDUCT TAX AT SOURCE IN RESPECT OF THIS PAYMENT. 4. ACCORDING TO THE AO THE AMOUNT PAID BY THE ASSESSEE CONSTITUTE S RENT WITHIN THE MEANING OF SECTION 194 - I OF THE ACT; SINCE THE ASSESSEE HAS ITA NO. 7515/MUM/2013 M/S. IDBI BANK LTD. 2 NOT DEDUCTED TAX AT SOURCE, IT COMMITTED DEFAULT IN TERMS OF SECTION S 201(1) AND SECTION 201(1A) OF THE ACT. ACCORDINGLY HE CALCULATED THE TAX AND INTEREST PAYABLE UN DER SECTIONS 201(1) AND 201(1A) RESPECTIVELY. 5. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE LEASE PREMIUM PAID FOR SANCTION ING OF ADDITIONAL BUILT UP AREA CANNOT BE EQUATED TO PAYMENT OF RENT; EVEN THOUGH IT IS TERMED AS LEASE PREMIUM IT WAS A C APITAL PAYMENT FOR THE PURPOSE OF ACQUIRING LONG TERM LEASE HOLD RIGHTS IN THE LAND AND HENCE FALLS OUTSIDE THE KEN OF SECTION 194 - I OF THE ACT. 6. THE LEARNED CIT(A) OBSERVED THAT THE PREMIUM IS PAID FOR OBTAINING LEASE AND HENCE IT CANNOT BE EQUATED WITH RE NT, WHICH IS PAID PERIODICALLY. HE HAS ALSO VERIFIED THE RECORDS TO NOTICE THAT IT WAS PAYMENT FOR GRANTING ADDITIONAL FSI. ASSESSEE HAS MADE PAYMENT TO MMRDA FOR ACQUIRING LEASEHOLD LAND AND ADDITIONAL BUILT UP AREA. HAVING REGARD TO THE DECISION OF THE J URISDICTIONAL HIGH COURT IN THE CASE OF KHIMLINE PUMPS LTD. 258 ITR 459 AS WELL AS THE DECISION OF THE ITAT IN THE CASE OF WADHWA AND ASSOCIATION REALTORS (P) LTD. THE DEMAND RAISED BY THE AO WAS SET ASIDE BY THE CIT(A). 7. AGGRIEVED, REVENUE IS IN APPEAL BEF ORE US. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE HAS COME UP BEFORE ITAT I BENCH , MUMBAI IN ASSESSEES OWN CASE FOR A.Y. 2008 - 09 (ITA NO. 4737/MUM/2013 DATED 24.11.2014) WHEREIN THE BENCH FOLLOWED THE DECISION OF ITS EARLIER ORDER IN THE CASE OF M/S. WADHAWA AND ASSOCIATES REALTORS PVT. LTD. TO HOLD THAT PROVISIONS OF SECTION 194 - I CANNOT BE INVOKED IN THE FACTS OF THE CASE, IN WHICH EVENT ASSESSEE CANNOT BE SAID TO BE IN DEFAULT UNDER SECTIONS 201(1) AND 201(1 A). 8. THE LEARNED D.R. COULD NOT PLACE ANY CONTRARY JUDGEMENT ON THIS ASPECT AND HE HAS NOT DISPUTED THE FACTUAL MATRIX OF THE CASE ALSO. 9. HAVING HEARD THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT(A) DOES NOT CALL FOR ANY INTERFER ENCE, SINCE ON IDENTICAL ISSUE THE ITAT I BENCH, MUMBAI IN ASSESSEES OWN CASE HELD THAT THE LEASE PREMIUM PAID BY THE ASSESSEE TO MMRDA WAS NOT IN THE NATURE OF RENT AS ITA NO. 7515/MUM/2013 M/S. IDBI BANK LTD. 3 CONTEMPLATED IN SECTION 194 - I OF THE ACT AND CONSEQUENTLY THE ASSESSEE CANNOT BE SAI D TO BE IN DEFAULT IN TERMS OF SECTIONS 201(1) AND 201(1A) OF THE ACT. WE, THEREFORE, UPHOLD THE ORDER PASSED BY THE CIT(A). 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2015. SD/ - SD/ - ( SANJAY ARORA ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 17 TH JUNE, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 24 , MUMBAI 4. THE CIT LTU , MUMBAI CITY 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.