TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 158
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....n by ignoring the fact that the same was passed in order to give effect to the order of Hon'ble High Court Mumbai. 2. On the facts and in the circumstances of the case as well as in law, the learned CIT(A) has erred in not appreciating that payment of Rs. 66,39,56,250/- made by the assessee to M/s Mumbai Metropolitan Regional Development Authority is covered under the definition of "Rent" as per provisions of section 194-1 of the IT Act. 3. On the facts and in the circumstances of the case as well as in law, the learned CIT(A) has erred in not treating the assessee in default within the meaning of section 201 (1) of the IT Act for non deduction of TDS on payment of Rs. 66,39,56250/-. " 3. The main grounds raised by the revenue in ITA No.5208/D/2012 for AY 2009-10 read as under:- "1. On the facts and in the circumstances of the case as well as in law, the learned CIT(A) has erred in not appreciating that payment of Rs. 65,80,59,700/- made by the assessee to M/s Mumbai Metropolitan Regional Development Authority is covered under the definition of "Rent" as per provisions of section 194-1 of the IT Act. 2. On the facts and in the circumstances of the case as well as in la....
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....ued a notice dated 09.02.2012 in respect of proceedings u/s 201/201(1A) calling for details and documents in relation to AY 2010-11. In reply, it was argued on behalf of the assessee that it was not exigible to deduct tax at source u/s 194-I on the lease premium paid to MMRDA and consequently, the assessee cannot be deemed as assessee in default. The TDS Officer vide order dated 30.03.2012 rejected all the contentions of the assessee and proceeded to saddle the demand of Rs. 8,39,81,641/- u/s 201(1) of the Act, Rs. 6,58,05,970 and u/s 201(1A) of Rs. 1,81,75,671/- respectively. 6. Being aggrieved by the above order of the Assessing Officer, the assessee carried the matter in appeal before the Commissioner of Income Tax(A) which was partly allowed. Now the revenue is before this Tribunal with the grounds as mentioned hereinabove. Ground No.1 of ITA No. 5207/Del/2012 7. Apropos ground no.1, ld. DR submitted that the Commissioner of Income Tax(A) has erred in treating the order passed by Assessing Officer/TDS Officer u/s 201(1)/201(1A) of the Act as barred by limitation by ignoring the fact that the same was passed in order to give effect to the order of Hon'ble High Court of Bombay....
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....by the Appellant and therefore, ground nos. 2 and 3 are allowed." 9. After careful consideration of the contentions and submissions of both the parties in this regard, at the outset, we observe that as per facts recorded by the Commissioner of Income Tax(A), Hon'ble High Court of Mumbai quashed the order of TDS Officer, Mumbai leaving the issue open for appropriate competent authority to initiate TDS proceedings. The DR appearing for the Revenue has not disputed the point that Hon'ble High Court of Mumbai left the issue open for the appropriate competent authority to initiate TDS proceedings, keeping in view the law of limitation, meaning thereby that the Hon'ble High Court of Mumbai simply quashed the order of TDS officer, Mumbai perhaps on the ground of jurisdiction and the issue was left to be decided by the competent authority but the period of limitation has to be taken from the relevant provisions of the Act which cannot be extended by judicial pronouncements. On careful perusal of the relevant para of the impugned order, we observe that the Commissioner of Income Tax(A) has dealt the issue of limitation as per relevant provisions of the Act and rightly held that the order w....
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....re of the existence of that relationship. Its another vital characteristic is that it is a one time non-recurring payment for transferring and purchasing the right to enjoy the benefits granted by the lessor resulting in conveyance of some of the rights, title and interest in the property out of such a bundle of rights. ii) In the Appellant's case, the premium Rs. 88,52,75,000/- has been paid in two installments on 27.12.2005 [Rs.22,13,18,750/-] and 18.02.2008 [Rs.66,39,56,250/-] to MMRDA in respect of the Bandra land and as per the lease agreement dated 09.04.2008 read with the possession receipt dated 10.04.2008 issued by MMRDA the lease starts from 09.04.2008 and hence the payment of Rs. 88,52,75,000/- is before the initiation of the tenancy relationship between the Appellant and MMRDA and consequently, a cardinal ingredient of premium as advocated in the case laws cited supra is satisfied. . iii) Moreover, the payment Rs. 88,52,75,000/- is made only once for all by the Appellant since there is no other further payment apart from Rs. 88,52,75,000/- which can be attributed to bringing into existence the foregoing landlord and tenant relationship between the Appellant and ....
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....he abovementioned view has been approved by the jurisdictional Delhi High Court in KRISHAK BHARA TI v. CIT DECIDED ON 12.07.2012 to which my attention was drawn by the learned counsel vide letter dated 23.07.2012 enclosing the copy of the same. Thus in conformity with the consistent stand of the judiciary including the latest pronouncement of the jurisdictional High Court, in my view, undoubtedly premium in relation to leased land is a payment on capital account not liable to be classified as revenue outgoing and I hold accordingly. On the facts and circumstances of the present case, even the revenue in its affidavit in reply dated 14.09.2011 filed in the Bombay High Court in Writ petition no 1504 of 2011 instituted by the Appellant has accepted that MMRDA has construed the receipt of premium as a capital receipt not exigible to tax and the AO (TDS), Delhi cannot now approbate and reprobate, on the above issue. In DURGA KHANNA v. CIT 72 ITR 796 (SC), the Supreme Court held that the onus is on the revenue to demonstrate that premium has been camouflaged as advance rent and the Assessing Officer, in the instant case has not brought on record any material to indicate that the rent has....
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....on payment made to MMRDA. The DR further contended that as per section 201 of the Act where any person including the Principal Officer of a company who is required to deduct any sum in accordance with the provisions of this Act or referred to sub-section 1A of Section 192 of the Act being an employer does not deduct or does not pay or after deduction fails to pay the whole or in part of the tax as required by the Act, then such person shall, without prejudice to any other sections which he may incur, be deemed to be an assessee in default in respect of such taxes. 14. Replying to the above, the counsel of the assessee submitted that the payment of lease premium was payment of capital expenditure and the payment was not liable for tax deduction at source by the payee, therefore, the assessee had no occasion to deduct tax at source and in this situation, the Assessing Officer/TDS officer wrongly held that the assessee was liable to deduct tax at source on payment of lease premium to MMRDA. The counsel of the assessee vehemently submitted that when TDS was not required to be made, how the assessee can be held liable for default in not deducting TDS from the payment of lease rent paid....