2017 (5) TMI 112 - AT - Income Tax

Non deduction of TDS - rent - premium paid to MMRDA by the Assessee for additional FSI - AO treated the premium paid by the Assessee as akin to rent and therefore since the Assessee failed to deduct TDS u/s 194-I of the Act he held the Assessee as defaulter u/s 201(1) and also charged interest u/s 201(1A) for failure to deduct TDS on such premium paid by the Assessee to MMRDA - Held that - the Tribunal in Assessee s own case for the assessment year 2009-10 considered similar issue and held that the lease premium paid by the Assessee to MMRDA for acquiring staircase, lifts, lift room, lobbies etc. as additional FSI is not in the nature of rent within the meaning of Section 194-I and therefore the Assessee need not deduct TDS - appeal dismissed - decided against Revenue.

Summary

Issues:
Non-deduction of TDS on premium paid to MMRDA for additional FSI.

Analysis:
The appeals by Revenue concern the non-deduction of TDS on payments to MMRDA for additional FSI. The Assessing Officer treated the premium as rent, holding the Assessee in default under sections 201(1) and 201(1A) for not deducting TDS under section 194-I. The Ld. CIT (Appeals) relied on a Mumbai Bench decision in Wadhwa Associates Realtors case, ruling that TDS was not required on the premium paid for FSI. The Assessee cited a previous favorable decision by a Coordinate Bench for the assessment year 2009-10. The Tribunal in the present case, considering these arguments, found that the premium paid for additional FSI was not akin to rent under section 194-I, aligning with previous decisions.

The Tribunal analyzed the nature of the premium paid by the Assessee to MMRDA for additional FSI, emphasizing that it was not rent under section 194-I. The Tribunal referred to the Assessee's case for the assessment year 2009-10 and similar cases where it was established that such payments were not subject to TDS. The Tribunal highlighted the distinction between rent and the premium paid for additional FSI, following precedents and rejecting the Revenue's grounds.

The decision was based on the Tribunal's findings that the premium paid for additional FSI did not fall under the definition of rent as per section 194-I. The Tribunal reiterated previous judgments and upheld the Ld. CIT (Appeals) order, dismissing the Revenue's appeals. The Tribunal emphasized the consistency in decisions on similar issues and upheld the Assessee's position, concluding that TDS was not required on the premium paid to MMRDA for additional FSI.

In conclusion, the Tribunal dismissed the Revenue's appeals, affirming that the premium paid to MMRDA for additional FSI was not subject to TDS under section 194-I. The decision was based on established legal principles and precedents, maintaining consistency with previous judgments on similar matters. The Tribunal's analysis focused on the nature of the payment and its classification, ultimately ruling in favor of the Assessee based on the interpretation of relevant tax provisions and legal precedents.