Income Tax Appellate Tribunal - Delhi
The Indian News Paper Society, New Delhi vs Department Of Income Tax
ITA NO. 4660/Del/2013
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "H", NEW DELHI
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 4660/DEL/2013
A.Y. : 2011-12
ITO, Ward 50(1), VS. M/s Indian News
Room No. 504, Paper Society,
Aayakar Bhawan, INS Building, Rafi
Laxmi Nagar, Marg,
New Delhi - 110 092 New Delhi - 110 001
(PAN: AAATI0416Q)
(APPELLANT) (RESPONDENT)
Assessee by : Sh. Sanjeev M Shah, Advocate
Department by : Sh. Sameer Sharma, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals-XXX), New Delhi dated 02.5.2013 pertaining to assessment year 2011-12.
2. The grounds raised read as under:-
i) On the facts and in the circumstances of the case as well as in law, the Ld. CIT(A) has erred in not appreciating that payment of Rs. 16,93,03,285/- made by the assessee to M/s Mumbai Metropolitan Regional Development Authority (MMRDA) is covered under the definition of "Rent: as per provisions of section 194I of the I.T. Act.
ii) On the facts and in the circumstances of the case as well as in law, the Ld. CIT(A) has erred in not treating the 1 ITA NO. 4660/Del/2013 assessee in default within the meaning of section 201(1) of the I.T. Act for non deduction of the TDS on payment of Rs. 16,93,03,285/-.
iii) The appellant craves leave to add, alter or amend any of the grounds of appeal at the time of hearing.
3. AO in this case held that the TDS was required to be deducted by the assesee under section 194I of the I.T. Act on the lease premium of Rs. 16,93,03,285/- paid to MMRDA towards additional premium for additional built up area. In this regard, AO referred to similar addition made in earlier assessment year. 3.1 AO further held that the assessee company has failed to deduct the TDS as above for which no reasonable cause could be furnished , therefore, the deductor company was treated as assessee in default under section 201(2) of the I.T. Act.
4. Upon assessee's appeal Ld. CIT(A) following the reasoning in his two appellate orders in assessment year 2008-09 and 2010-11, held that he was of the view that the impugned payment made from any angle cannot be determined as rent as postulated in section 194I and hence he held that the assessee was not liable to deduction of tax at source and thus cannot be treated as assessee in default under section 201 of the I.T. Act.
5. Against the above order the Revenue is in appeal before us.
6. We have heard both the counsel and perused the records. Ld. Counsel of the assessee at the out set submitted that the issue involved is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case in ITA No. 5207/Del/2012 (A.Y. 2007-08) and in ITA No. 5208/Del/2012 for 2 ITA NO. 4660/Del/2013 asstt. year 2009-10 vide order dated 20.6.2013. In the said order the Tribunal had referred to the CIT(A)'s order and affirmed the same by holding as under:-
Para 12. In view of above observations, we clearly observe that the Commissioner of Income Tax(A) has also dealt with other cases pertaining to the land leased by MMRDA in the same or adjoining area and has held that the impugned deposit of lease premium does not constitute advance rent but it is a lease premium for acquiring land with right to construct a commercial building although with certain restrictions, but it is a capital expenditure not falling within the ambit of section 194-I of the Act. We also observe that the payment of lease premium was not to be made on periodical ITA No.5207 & 5208/Del/2012.
Para 16. In view of discussions made hereinabove, we are not in agreement with the findings of the Assessing Officer and we decline to hold that the Commissioner of Income Tax(A) has erred in not treating the assessee as assessee in default within the meaning of section 201(1) of the Income Tax Act for non-deduction of TDS on payment of lease premium to MMRDA. At the cost of repetition, it is worthwhile to mention that for invoking the provisions of section 201(1) of the Act, this is a pre- condition that the person should be required to deduct 3 ITA NO. 4660/Del/2013 any sum in accordance with the provisions of this Act and he does not deduct, or does not pay or after deduction fails to pay the whole or in part of the tax as required under the provisions of the Act, then only such person shall be deemed to be an assessee in default in respect of payment of such tax. In the case in hand, the assessee was not liable to deduct any tax on payment of lease premium to MMRDA because it was capital expenditure to acquire land on lease with substantial right to construct a commercial building complex. Para 17. To sum up, we finally hold that the assessee was not liable to deduct tax at source from the payment made to MMRDA as lease premium, therefore, the Commissioner of Income Tax(A) rightly decided this issue in favour of the assessee and we have no reason to interfere with the findings of the Commissioner of Income Tax(A) in this regard. Accordingly, ground no. 3 of ITA 5207/D/12 and ground no.2 of ITA 5208/D/12 being devoid of merits are dismissed."
7. Ld. DR could not controvert the above submissions. Thus on identical facts in preceding year Tribunal has decided the issue in assessee's favour. Respectfully following the precedent as above, we uphold the order of the Ld. CIT(A) and decide the issue in favor of the assessee.
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ITA NO. 4660/Del/2013
8. In the result, the Appeal filed by the Revenue stands dismissed.
Order pronounced in the Open Court on 27/1/2014, upon conclusion of hearing.
Sd/- Sd/-
[RAJPAL YADAV]
YADAV] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 27/1/2014
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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ITA NO. 4660/Del/2013
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