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Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI
Before: Shri Joginder Singh, & Shri Rajesh Kumar
Per Joginder Singh (Judicial Member) Both these appeals, are by the Revenue with respect to different assessees, having common issues, wherein, the impugned order dated 21/02/2013 of the ld. First Appellate Authority, Mumbai, have been challenged. Since the issue and the facts are identical, argued/heard together, therefore, both these appeals are being disposed off by this common and consolidated order.
During hearing of these appeals, we have heard Shri Vijay Kumar Soni. Ld. DR, who advanced his arguments which are identical to the ground raised. None appeared for the assessee in spite of issuance of registered notice, therefore, we have no option but to proceed ex-parte, qua the assessee, and proceed to dispose off the appeal on the basis of material available on record.
2.1. We have considered the submissions of the ld. DR and perused the material available on record. The facts, in brief, are that the ld. Assessing Officer passed order u/s 201(1) and 201(1A) on 29/11/2011 and charged tax and interest at Rs.2,53,67,314/- and Rs.1,27,80,684/- for non- deduction of tax on premium paid to CIDCO. Before coming to any conclusion, we are reproducing hereunder the relevant finding recorded by the ld. Commissioner of Income Tax (Appeals):-
3 M/s Millenium Associates & M/s Millenium Corporation & 3173/Mum/2014 “4. I have gone through the same and noted that same is for payment of lease premium as well as land revenue of plot no.11 in sector 10A for the development. Again by agreement dated 20.04.2010 for and amount of Rs.22,75,54,857/- for the plot no.9 & 10 in sector 10A. Appellant has also relied upon decision given by ITAT, Mumbai in case of Mr. Wadhava & Associates Realtors Pvt. Ltd. ITA NO.695/Mum/2012 and Shree Naman Developers Ltd. ITA NO.686 & 687/Mum/2012 and M/s Shah Group Builders Ltd. I.T.A. NO.4523/Mum/2012.
I have gone through the same and find that same are in favour of appellant. Also in the case of Panbari Tea Company Ltd. 57 ITR 422 (SC) Hon’ble Supreme Court decided that the lease premium is paid is a capital receipt and not revenue in nature. In view of this I am convinced that appellant was not liable to deduct tax on the payment of lease premium made to CIDCO and hence and not be held as an assessee in default. Consequently action of Assessing Officer to levy tax u/s 201 and interest u/s 201(1A) be not sustainable, the addition made are deleted herewith.
Further in appeal bearing no.CIT(A)-14/IT 1255 for A.Y. 2010- 11, as discussed above the issue involved the same, the decisions relied upon by the Assessing Officer as well as appellant also being same, in essence the matter being on the same line appeal in the case is also allowed.”
2.2. The facts, in brief, are that survey proceedings u/s 133A were carried out in the case of M/s City and Industrial 4 M/s Millenium Associates & M/s Millenium Corporation & 3173/Mum/2014 Development Corporation of Maharashtra Ltd. (CIDCO) on 04/02/2011, wherein, it was noticed that the assessees were allotted plots on payment of lease premium of Rs.19,46,02,098/- and Rs.3,45,02,097/- in F.Y. 2009-10 and 2010-11 respectively. As per the Assessing Officer, these payments were in the nature of lease rent, therefore, the assessee was to deduct at source on these payments and therefore in the absence of such deduction, there is contravention of the provisions of section 194-I of the Income Tax Act, 1961. The assessees were treated in defaults u/s 201(1) and 201(1A) of the Act for non-deduction of TDS on the amount of lease rent. The assessee preferred appeal before the ld. Commissioner of Income Tax (Appeals), wherein, following the decision of the Tribunal and also from the Hon’ble Apex Court, the assessees were held to be not in default. The Revenue is aggrieved and is in appeal before this Tribunal. Without going into much deliberation, the material available on record and the assertions made by the ld. DR, we find that the Tribunal, following the decision from Hon’ble Apex Court in Madhavrao Sindhia vs Union of India AIR 1971 SC 530 (at page 533), and in Panwari Tea Company Ltd. 57 ITR 422 (SC) held that lease premium paid is a capital receipt and not of revenue in nature, thus, we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (Appeals). Even otherwise, the case of the assesses find support from the decision in the case of Wadhwa & Associates Realtors Pvt. Ltd. (ITA NO.695/Mum/2012) wherein, lease premium paid to MMRDA, for acquiring lease hold rights, in a land at BKC was 5 M/s Millenium Associates & M/s Millenium Corporation ITA Nos. 3172 & 3173/Mum/2014 held to be capital expenditure. Identically, in ITO Vs Naman Developers (ITA No.686 & 687/Mum/2012) following the decision of the Wadhwa & Associates Realtors Pvt. Ltd. decided the issue in favour of the assessee. In ITO vs Shah Group Builders (ITA No.4523/Mum/2012) the lease premium paid to CIDCO for acquiring lease hold right was held to be capital in nature, thus, it can be concluded that no default was committed by the assesses u/s 201, 201(1A) of the Act. Both the appeals of the Revenue, being on identical facts, are therefore, dismissed. Finally, both the appeals of the Revenue are dismissed. This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 28/10/2015.