ITO (TDS) (OSD) RG 2, MUMBAI vs. INDIAN OIL CORPORATION LTD, MUMBAI

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ITA 2820/MUM/2014Status: DisposedITAT Mumbai11 May 2016AY 2010-113 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 the payment made by the assessee was not in the nature of 'rent' as contemplated under Section 194I of the Income Tax Act. Therefore, the assessee was not in default for non-deduction of TDS.

What were the facts?

The Revenue appealed against the CIT(A)'s order holding the assessee not liable for default under sections 201(1) and 201(1A) for lease rent paid to MMRDA. The payment was for seeking an extension of time to construct a building on a leasehold plot.

What were the issues?

Whether the lease rent paid for extension of construction time on a leasehold plot constitutes 'rent' for the purpose of TDS under Section 194I.

Which sections of the Income-tax Act were involved?

Section 194I,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “I”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM & SHRI MAHAVIR SINGH, JM

Hearing: 29/03/2016Pronounced: 11/05/2016

Heard together (2 matters)

ITA No.2820/Mum/2014
ITA No.5162/Mum/2014

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R PER R.C.SHARMA (A.M): These are the appeals filed by the revenue against the order of CIT(A)-Mumbai, for the assessment year 2010-2011 & 2011-2012, in the matter of order passed u/s.201(1) & 201(1A) of the I.T.Act.

2.

Common grievance of the assessee in both the years pertains to holding the assessee liable for default u/s.201(1) & 201(1A) in respect of lease rent paid to lesser MMRDA as per Explanation (1) to Section 194I of the Act.

3.

At the outset, ld. AR placed on record order of the Tribunal in assessee’s own case for the assessment year 2009-2010, wherein exactly similar issue was decided in favour of the assessee vide order dated 17-2-2016. 4. We have carefully gone through the order of the Tribunal in assessee’s own case, wherein the Tribunal held that assessee was not in default u/s.201(1) & 201(1A). Precise observation of the Tribunal are as under :- 2. In this appeal, although Revenue has raised multiple Grounds of appeal

1.

but the only grievance is against the action of the CIT(A) in holding that the provisions of Sec. 194I of the Act are not applicable in connection with payment of Rs.1,07,46,381/- made by the respondent-assessee to Mumbai Metropolitan Region Development Authority (MMRDA)

3. In brief, the relevant facts are that it was noticed by the Assessing Officer that the assessee had paid sum of Rs.1,07,46,381/- to MMRDA in connection with plot allotted to it on lease. According to the Assessing Officer, such payment constituted lease premium which was liable for deduction of tax at source u/s. 194I of the Act. Consequently, the assessee was held to be an assessee in default u/s. 201(1) of the Act for non-deduction of tax at source and also liable for payment of interest u/s. 201(1A) of the Act. As a result the total demand of Rs.33,17,169/- was raised in terms of Sec. 201(1) and 201(1A) of the Act. Before CIT(A), one of the points canvassed by the assessee was that the impugned payment was made for seeking extension of time to construct the building on the leasehold plot of land allotted by MMRDA, and therefore, it could not be construed as payment of „rent‟ within the meaning of Sec. 194I of the Act. The CIT(A) followed the decision of his predecessor in the assessee‟s own case for Assessment Year 2010-11 and held that there was no justification for invoking Sec. 194I of the Act in context of the impugned payment. Accordingly, the action of the Assessing Officer has been set-aside.

4. In this background, Revenue is in appeal before us. At the time of hearing, it was a common point between the parties that the decision of CIT(A) is in line with the earlier decisions of the Mumbai Bench of the Tribunal on similar issue viz. M/s. Wadhwa Associates Realtors (P) Ltd., 36 Taxman 526 (Mum) and Navi Mumbai SEZ (P) Ltd., 147 ITD 261 (Mum). The learned representative for the assessee pointed out that the order by the CIT(A) in assessee‟s

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