TaxTMI 
TaxTMI 
2015 (8) TMI 1024
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....e whole or any part of the tax at any time after expiry of two years from the end of the financial year in which the statement is filed in a case where statement referred to in Section in Section 200 has been filed. Referring to Section 200 of the Act, the Ld.counsel submitted that any person deducting any sum on or after 1.04.2005, shall, after paying the tax deducted to the credit of the Government within the prescribed time, prepare such statements quarterly for the year ending 30th June, 30th September, 31st December and 31st March in each financial year. According to the Ld. counsel, the assessee was filing its statements under Section 200 of the Act and also filed its TDS return in the first quarter of the financial year 2008-09. According to the Ld.counsel, the due date for passing the impugned order under Section 201(1) of the Act, for failure to deduct the tax was 31.03.2011. Therefore, According to the Ld. counsel, the order passed by the Assessing Officer on 3.10.2013 is barred by limitation. The Ld.counsel submitted that the time limit provided under the Act cannot be extended under any circumstances. 3. On the contrary, Dr. S. Moharana, the Ld. Departmental Represen....
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....s. The assessee paid Rs. 1412,79,68,017/- to Tamil Nadu Industrial Development Corporation Ltd. The Ld.counsel clarified that in fact the Government of Tamil Nadu authorized Tamil Nadu Industrial Development Corporation Ltd. to lease 25.27 acres of land to the assessee. The Ld.counsel further pointed out that out of Rs. 1412,79,68,017, TIDCO paid a sum of Rs. 1320 Crores to the Government of Tamil Nadu. The Assessing Officer by the impugned order found that the assessee has not deducted tax under Section 194-I of the Act, on the payment made to Tamil Nadu Industrial Development Corporation Ltd. to the extent of Rs. 1412.79 Crores for the year under consideration. According to the Ld. counsel, what was paid by the assessee is upfront fee for allotment of the land for 99 years. The Ld.counsel pointed out that the lease for 99 years is almost like a sale. Therefore, what was paid by the assessee is a sale consideration, hence there is no question of deduction of tax under Section 194-I of the Act. Referring to a unreported judgment of Madras High Court in CIT v. Rane Brake Linings Ltd. in Tax Case (Appeal) No.1031 of 2007 dated 07.04.2014, the Ld.counsel submitted that the upfront fee....
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....at the assessee took on lease the entire industrial undertaking along with land and building, plant and machinery, furniture and fixtures and vehicles for 99 years. Under the lease agreement, the assessee was required to pay the lessor annual payments for 99 years. The agreement provided that in the event of premises being acquired by the Government, the lessor would entitle only to the capitalized value of the rent accrued for the unexpired period of lease and the remaining surplus would be paid to the lessee. The lessee was given option to renew the lease at much lower rent. The assessee claimed the annual rent paid under the lease as revenue expenditure. However, the Assessing Officer found that the arrangement contained in the deed was in effect a sale of property to the assessee and the annual payment was a payment made towards purchase consideration of the property. Therefore, the Assessing Officer treated the same as capital expenditure. The Appellate authority upheld the order of the ITO. On further appeal before the Tribunal, it was found that the annual payments would be in the nature of equated annuity payments consisting partly of price of the asset and partly of either....
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....ur of Tamil Nadu Industrial Development Corporation (TIDCO) on 24.08.2007. In a letter dated 11.03.2010, it was observed that TIDCO paid only a sum of Rs. 1320.95 Crores to the Government of Tamil Nadu towards cost of the land. The balance of Rs. 91.85 Crores was retained by TIDCO. The Government observed that TIDCO has to retain only Rs. 5.50 Crores. However, the excess amount of Rs. 86.35 Crores was converted as term loan to TIDCO on payment of interest @ 10.5% per annum. Since the provisions of Section 194-I provide for deduction of tax on payment of rent for the use of the land, according to the Ld. D.R., the assessee is liable to deduct tax. Therefore, the CIT(Appeals) has rightly confirmed the order of the Assessing Officer. 10. We have considered the rival submissions on either side and perused the relevant material on record. We have also gone through the orders of the Government of Tamil Nadu. The Government order dated 11.03.2010 in G.O (Ms) No.28 issued by Industries (I.T) Department shows that the upfront land lease rent was escalated by 12% and Tamil Nadu Industrial Development Corporation received a sum of Rs. 1412.80 Crores from the assessee. However, Tamil Nadu I....
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....iate the exact nature of transaction between the assessee and Tamil Nadu Industrial Development Corporation. Therefore, we have to proceed only on the basis of the facts which were brought on record by the Assessing Officer. 11. We have carefully gone through the judgments relied upon by the Ld.counsel for the assessee during the course of hearing. In Rane Brake Linings Ltd. (supra), the Madras High Court found that lease for 99 years is as much as alienation as a sale. The Madras High Court placed reliance on the judgment of Apex Court in Palshikar (HUF) v. CIT reported in 172 ITR 311 and judgment of Madras High Court in Archaka Sundara Raju Dikshatulu v. Archaka Seshadri Dikshatulu (1928) 54 MLJ 76. The assessment year under consideration before the Madras High Court in Rane Brake Linings Ltd. was 1994-95. We find that that "transfer" is defined in Section 2(47) of the Act. In fact, Section 2(47) is an inclusive definition and substituted by Taxation Laws (Amendment) Act, 1984 with effect from 1.04.1985. We also find that Parliament has introduced Section 194-I of the Act by Finance Act, 1994 with effect from 1.06.1994. Explanation to Section 194-I was substituted by Taxation ....