DCIT(TDS), CIRCLE-1, KOLKATA, KOLKATA vs. M/S EARNEST TOWERS PVT LTD, KOLKATA

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ITA 1519/KOL/2016Status: DisposedITAT Kolkata09 March 2018AY 2013-142 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that lease premium paid is capital in nature and therefore, the assessee is not liable to deduct TDS on such payments. The Assessing Officer's order was deemed bad in law.

What were the facts?

The revenue appealed against the CIT(A)'s order concerning the deductibility of tax at source on lease premium paid by the assessee to MMRDA. The assessee paid lease premium for land. The Tribunal had previously ruled on a similar issue for an earlier assessment year.

What were the issues?

Whether tax is required to be deducted at source on lease premium paid for land, considering it as a capital expenditure.

Which sections of the Income-tax Act were involved?

Section 201,Section 201(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi]

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA [Before Sri J. Sudhakar Reddy, Accountant Member & Sri S.S. Viswanethra Ravi, Judicial Member] Assessment Year: 2013-14 DCIT(TDS), Circle-1, Kolkata……………………………………………………….…….……...Appellant 10B, Middleton Road Kolkata – 700 071 M/s. Earnest Towers Pvt. Ltd.…..……………………...………………..……………..….Respondent 9B Wood Street 4th Floor Kolkata – 700 016 [PAN : AABCE 8612 N] Appearances by: Shri Santosh Kumar Bajaj, FCA, appeared on behalf of the assessee. Shri S. Dasgupta, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : January 04th, 2018 Date of pronouncing the order : March 9th, 2018 O R D E R Per J. Sudhakar Reddy :-

This appeal filed by the revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals)-24, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 31/05/2016.

2.

After hearing rival contentions, we find that the only issue for our consideration is as to whether tax need to be deducted at source on lease premium paid by the assessee to MMRDA against lease of land. The Tribunal on the very same issue in the assessee’s own case for the Assessment Year 2008-09, in at page 16 para 5 held as follows:- “5. As regards ground no. 2 of the revenue the said issue is covered against the revenue in various judicial pronouncements as mentioned herin above. In the case of ITO vs Indian Newspaper Society (supra) ITAT Delhi Bench has held that in case the lease premium paid by the assessee is held to be capital in nature and the assessee is not liable ot deduct TDS on payment of lease premium to MMRDA. The issue is therefore decided against the revenue. Thus ground no. 2 of the revenue is dismissed.”

3.

The Hon’ble Delhi High Court in the case of Krishak Bharati Cooperative Ltd. vs Deputy CIT, judgement dt. 12/07/2012, took a view that lease premium paid was capital expenditure and not allowable as Assessment Year: 2013-14 M/s. Earnest Towers Pvt. Ltd expenditure. Hence T.D.S. provisions have no application on the facts of this case. 4. Respectfully following the same, we uphold the order of the ld. CIT(A) that the order passed by the Assessing Officer u/s 201/201(1A) of the Act, is bad in law, and dismiss this appeal of the revenue.

5.

In the result, appeal of the revenue is dismissed.

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