2017 (9) TMI 293

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....cer dated 31.3.2011 under section 201(1)/201(1A) of the Income Tax Act, 1961(in short 'the Act). Since issue involved in both these appeals pertains to the addition on account of section 201 and 201(1A), these appeals were clubbed together, heard together and are being disposed of by this common order, for the sake of convenience. ITA NO.4124/Mum/2015 2. Ground no.1 is against the upholding that the provisions for rent of Rs. 2,83,91,800/- was subject to Deduction of Tax At Source under the provisions of section 194-I of the Income Tax Act, 1961. 3. A survey u/s 133A of the Act was carried out on 23.12.2008 at the business premises of the assessee at Marathon Innova, B Wind, 1st floor, Marathem Next Gen Complex, Ganpatrao Marg, Low....

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....y clearances. The lease agreement was executed on 20.10.2006 and under the said agreement the assessee was given a right to purchase the said property. The assessee vide letter to builder dated 25.10.2006 accepted right to purchase from the builder subject to the conditions that the builder should obtain NOC and get the property released from the proceedings of the local authority. Vide letter dated 28.5.2007 the assessee exercised its right to purchase the property and in the mean time lease was terminated. The builder however failed to honour the commitments and assessee has to file a suit for specific performance on 3.7.2008. However, during the pendency of the suit the statutory auditors advised that the provision should be created for ....

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....iming any expenditure of lease rental on the ground that the provisions were of contingent nature and were never ever paid. We therefore are inclined to set aside the order of the FAA and hold that the provisions of section 194-I of the Act are not applicable where the assessee has not claimed the deduction of the expenses by suo motu making the disallowance u/s 40(a)(ia) of the Act. The AO is directed accordingly. The ground raised by the assessee is allowed. 7. Grounds of appeal no.2 is against the upholding the order of AO that TDS was attracted on internet charges and leaseline charges. 8. During the course of assessment proceedings, the AO observed that the assessee has paid lease line charges and internet charges to M/s Advance ....