आयकर अपीलीय अधिकरण, मब
ुं ई न्यायपीठ ‘बी’ मब
ुं ई
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI
श्री डी. करुणाकरा राव, लेखा सदस्य, एवुं श्री अमरजीत ससुंह, न्याययक सदस्य, के समक्ष
BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM
आयकर अपील सं/
I.T.A. No.3889/M/14
(यििाारण वर्ा / Assessment Year: 2009-10)
Income Tax Officer
बिाम/ Mumbai Pune Motor Malak
(TDS)2(3),
Shramjivan Premises Co -op.
Vs.
R. No. 708, 7 t h Floor,
Society Ltd.
Smt. K.G.Mittal Ayurvedic
Building No.4/212,
Hospital Building, Charni
Abhyudaya Nagar,
Road, Mumbai 400 002
Kalachowki, Mumbai
400033
स्थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAAAM8387M
(अपीलाथी /Appellant)
Assessee by:
Department by:
(प्रत्यथी / Respondent)
..
Shri Mandar Vaidya
Shri Sumit Kumar
सुनवाई की तारीख / Date of Hearing: 26.11.2015
घोषणा की तारीख /Date of Pronouncement:
04.12.2015
आदे श / O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the appeal against the order of learned Commissioner
of Income Tax (Appeals)-14, Mumbai [hereinafter referred to as the “learned
CIT(A)”] dated 07.03.2014 relevant to the A.Y. 2003-04 passed u/s
201(1)/201(1A) of the Income Tax Act, 1961( in short “the Act”).
ITA No. 3889/M/14
A.Y. 2009-10
2.
The revenue has raised the following grounds of appeal:“(i) On the facts and in the circumstances of the case and in
law, the Ld.CIT(A) has erred in holding that the amount paid by
the Lessee (M/s. Mumbai Pune Motor Malak Shramivan Premises
C.H.S. Ltd.) to the Lessor (MMRDA) was not in the nature of rent,
as defined in the Explanation (i) to section 1941 of the Act for the
purpose of deduction of tax at source.”
“(ii) On the facts and in the circumstances of the case and in
law, the Ld.CIT(A) has erred in accepting the claim of the assessee
that no tax was deductible under section 1941 from the payment
made by the assessee to MMRDA for acquisition of the plot of land
on lease from MMRDA.”
“(iii) On the facts and in the circumstances of the case and in
law, the Ld. CIT(A) has erred in not confirming the order of the
Assessing Officer treating the assessee as an assessee in default
u/s. 201 (1) in respect of the amount of tax which has not been
deducted under section.194I from the payment made to MMRDA
and levyinq interest under section 201(1A).”
“ (iv) On the facts and in the circumstances of the case and in
law, the Ld.CIT(A) has erred in ignoring the definition of rent, as
contained in section 194I and in resorting to interpretative
reasoning whereas as per the settled principle of jurisprudence,
this exercise is required only when the law is unclear.”
“(v) On the facts and in the circumstances of the case and in
law, the Ld.CIT(A) has erred in going into the question of
taxability of the payment made by the assessee to MMRDA despite
the decision of the Apex Court in the case of The Aggarwal
Chambers of Commerce V. Ganpat Rai Hiralal, 33 ITR 245, where
it has been held that the persons who are responsible for deduction
of tax at source are not concerned with the ultimate result of
assessment.”
3.
In brief, a survey proceeding u/s. 133A was carried out in the case of
M/s.Mumbai Metropolitan Area Development authority (MMRDA) on 09.02.2011.
In the course of survey proceedings, it was noticed that M/s. Mumbai Pune Motor
Malak Shramjivan Premises Coop. Scty. Ltd.(the assessee) had entered into a lease
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ITA No. 3889/M/14
A.Y. 2009-10
agreement with MMRDA and the assessee paid Rs,20,25,416/- on 27.08.2008.
The payment was in the nature of lease rent. However, in accordance with the
provisions of section 194I of the Act, the assessee did not deduct of tax at source.
Thereafter, giving proper opportunity of being heard the assessee was directed to
pay the tax along with interest to the tune of Rs.5,96,204/- vide assessment order
dated 30.03.2011. Being not satisfied with the order of Assessing Officer, the
assessee filed the appeal before learned CIT(A) and learned CIT(A) accepted the
appeal of the assessee and held that the assessee was not liable to deduct the tax
u/s.194I on the lease premium paid to MMRDA. Aggrieved by the order, the
assessee has filed the present appeal before the Tribunal.
4.
We have heard the arguments advanced by the learned representative of the
parties and have gone through the case files carefully. Mainly, the revenue has
contended that assessee has paid lease premium in the nature of rent to MMRDA,
therefore, the assessee was liable to deduct the income tax at source payable to the
department.
Lease agreement dated 17th January 2007 and lease agreement
(rectification) dated 13th September 2007 lies in the paper book speaks about the
lease agreement of the assessee firm with MMRDA. The receipt which also lies at
page 28 in the paper book speaks about the payment to MMRDA to the tune of
Rs.20,25,416/- on account of lease premium which had been paid by the assessee
in view of receipt attached with the paper book at page 30. Whether the lease
premium can be treated as rent or not, this question the come before the Mumbai,
Tribunal in case of M/s. Wadhwa Associates Realtors (P) Ltd. (2013) 36 Taxman
526, Mumbai wherein it is held that the lease premium paid to the MMRDA is not
liable to be taxed u/s 194I of the Act. On the basis of aforesaid order the learned
CIT(A) has passed the order in question dated 07.03.2014. The relevant para in
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ITA No. 3889/M/14
A.Y. 2009-10
case of M/s. Wadhwa Associates Realtors (P) Ltd. (2013) 36 Taxman 526,
Mumbai is hereby held as under:
We have carefully perused the lease deed as exhibited from
page l to,42 o the Paper Book. A careful reading of the said lease
deed transpires that the premium is not paid under a lease but is
paid 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 the rent which is paid periodically. A perusal of the
records further show that the payment to MMRDA is also for
additional built up area and also for granting free of FSI are, such
payment cannot be equated to rent. It is also seen that MMRDS in
exercise of power u/s.43 r.w.s. 37(1) of the Maharashtra Town
Planning Act, 1966, MRTP Act and other powers enabling the
same has approved the proposal to modify regulation 4A(ii) and
thereby increased the FSI of the entire 'G' block of BKC. The
Development 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 additional area on the aforesaid
plant. Thus the assessee has made. payment to MMRDA under
Development Control for acquiring leasehold land and additional
built up area. The decision of the Tribunal in the case of National
Stock Exchange [supra] and M/s. Mukund Ltd. [supra] have been
well discussed by the ld. CIT(A) in his order. The decision of the
Hon'ble jurisdictional High Court in the case of M/s.Khimline
Pumps Ltd. [supra] squarely and directly apply on the facts of the
case wherein the · Hon'ble jurisdictional High Court has held that
payment for acquiring leasehold land is a capital expenditure.
Considering the entire facts in totality in the light of the judicial
decision vis a vis provisions of section 194I, definition of rent as
provided under the said provisions, we. do not find any reason to
tamper or interfere with the findings of the Ld CIT(A) which we
confirm.”
5.
Subsequently, the matter was again considered by the Hon’ble Tribunal of
Mumbai in ITA 1298/M/14 order dated 24.11.2015 in case titled as ITO(TDS) 2(5)
Vs. Palton Yarn Pvt. Ltd., Mumbai vide which the order passed by the Mumbai
Tribunal mentioned above has been followed. The learned CIT(A) has passed the
order on the basis of Tribunal order and we are also by honoring the order of the
Mumbai Tribunal, nowhere found any ground to interfere with.
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ITA No. 3889/M/14
A.Y. 2009-10
6.
Accordingly section 194I is not applicable to this case hence, the question of
interest in view of the provision u/s. 201(1)/201(1A) also does not arise.
7.
Accordingly, the appeal filed by the revenue is hereby dismissed.
Order pronounced in the open court on 4th December, 2015.
Sd/-
Sd/-
(D.KARUNAKARA RAO)
लेखा सदस्य / ACCOUNTANT MEMBER
मुंबई Mumbai; ददनांक Dated :
(AMARJIT SINGH)
न्याययक सदस्य/JUDICIAL MEMBER
4th December, 2015
MP
आदे श की प्रयतसलपप अग्रेपर्त/Copy of the Order forwarded to :
1.
अपीलाथी / The Appellant
2.
प्रत्यथी / The Respondent.
3.
आयकर आयक्
ु त(अपील) / The CIT(A)-
4.
आयकर आयुक्त / CIT
5.
ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण, मुंबई / DR, ITAT,
Mumbai
6.
गार्ड फाईल / Guard file.
आदे शािसार/ BY ORDER,
सत्यावपत प्रयत //True Copy//
उप/सहायक पुंजीकार
(Dy./Asstt. Registrar)
आयकर अपीलीय अधिकरण, मंब
ु ई / ITAT, Mumbai
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ITA No. 3889/M/14
A.Y. 2009-10
Date
Initials
Original dictation pad is enclosed at
the end of file
1.
Draft dictated on:
27.11.2015
Sr. PS/PS
2.
Draft placed before author:
30.11.2015
Sr. PS/PS
3.
Draft proposed & placed before the second
member:
JM/AM
4.
Draft discussed/approved by Second
Member:
JM/AM
5.
Approved Draft comes to the Sr. PS/PS:
Sr. PS/PS
6.
Order pronounced on:
04.12.2015
7.
File sent to the Bench Clerk:
04.12.2015
8.
Date on which file goes to the Head Clerk:
9.
Date on which file goes to AR
10.
Date of dispatch of Order:
Sr. PS/PS
Sr. PS/PS
6