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TMI Blog2015 (6) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Shri Premanand J For the Respondent : Shri Harsh Bhuta ORDER Per I P Bansal,JM. This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-II, Thane dated 24/07/2012 for assessment year 2010- 11. Grounds of appeal read asunder: 1. The Learned CITCA) has failed to appreciate that the proceedings for assessment of income of the payee stand on a different footing from the proceedings u/s 201 in the case of the deductor where liability to deduct TDS is to be determined as per the specific provisions enshrined in section 194I of the Act. 2. The Learned CIT CA) has erred in law and on facts in failing to appreciate that TDS provisions in Chapter XVIIB are attracted even in respect of acquisition of capital assets as evident from the provision of law contained in sec. 194LA of the I.T.Act, 1961. 3. The Learned CIT CA) has erred in law and on facts in engaging into academic exercise of Approbate and Reprobate without appreciating the established legal principle that Chapter XVIIB of which Section 194 I is a part, contains a self contained code for the purpose of TDS and other sections of the I.T.Act which involve int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mumbai Tribunal in the Assessee s own case for A.Y 2008-09 in ITA No.4592/Mum2012 2. Order of Mumbai Tribunal in the case of ITO (TDS) v. Wadhwa Associates Realtors (P) Ltd. (146 ITD 694) 3. Order of Mumbai Tribunal in the case of TRO (TDS) v/s. M/s. Shree Sawan Builders Developers Pvt. Ltd., ITA No.6148 6149/M/2012 order dated 12/06/2014. Copy of all these decisions are placed in the paper book. 4. We have heard both the parties and their contentions have carefully been considered. Mumbai Tribunal has been taking consistent view that on lease payment made by the assessee to CIDCO there was no liability of deduction of tax. For the sake of brevity reference to all these decision is not made. Reference is made to the decision in the case of TRO(TDS) v. M/s. Shree Sawan Builders Developers Pvt.(supra) wherein both of us are party and relevant portion of the said decision is reproduced below: 3.1 Revenue has raised as many as 12 grounds to contest deletion made by Ld. CIT(A) who has deleted this demand following the judicial precedences mentioned in the impugned order passed by Ld. CIT(A). 4. During the course of hearing it was submitted by Ld. AR that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at source from the payment of lease premium made to CIDCO. The assessee filed its reply to show cause notice issued by the A.O. explaining its stand on the issue and after considering and discussing the same in detail, the A.O. held that the assessee was liable to deduct tax at source from the payment made to CIDCO on account of lease premium and treated the assessee in default for failure to do so for the following reasons given in the order passed u/s 201(1) and 201(1A) of the Act: At the outset, it needs to be mentioned that the Assessee s representative has vehemently claimed that the payment referred in show cause does not bear the character of Rent mentioned in Sect. 1941 and therefore there is no requirement of deduction of tax from such payment made to CIDCO. The land under question has been given by the Lessor to the assessee on Lease and for which it has paid the premium of ₹ 70,85,01,870/-. This lump-sum payment made by the Leasee i.e. M/s. Shah Group Builders Ltd. (assessee) has been made to avoid recurring payment by instalments by the them to the Lessor. The payment so made by the assessee is a Rent for enjoyment and occupancy of the impugned land. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary to mention that the Legislature has taken due care of such situations arising by usage of different terminology by providing a comprehensive definition of Rent in the section itself. In the light of the facts of the case, statutory provisions of Sect. 1941 especially definition of Rent provided in explanation thereto and the case laws cited above the undersigned has no slightest hesitation in arriving at the conclusion that assessee was required to deduct tax u/s. 1941 and pay it to the Govt. Treasury within the stipulated time as required by provisions of chapter XVI1 B of the income Tax Act. Admittedly assessee has not complied with the provisions of section 1941 and thereby chapter XVII B of the income Tax Act by deducting the TDS from the Lease Rent paid to the C1DCO and not paid it to the Government Treasury. As a result Assessee has committed default within the meaning of section 20 1(1) and thereby it is an assessee in default . Accordingly, assessee is treated as assessee in default and directed to make payment of interest u/s. 201(1A). 4. Against the order passed by the A.O. u/s 201(1)/201(1A) of the Act, the assessee filed its appeal before the ld. CIT(A) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following reasons given in para 9 to 10 of its order dated 3-7-2013 (supra):- 9. We have considered the rival submissions, perused the order of the lower authorities and the material evidence brought on record in the form of paper Book and the judicial decisions relied upon by the rival parties. The entire grievance revolves around the premium paid by the assessee to M/s. MMRDA Ltd. for the leasehold rights acquired by the assessee through the lease deed dt. 22nd November, 2004. It is the say of the Revenue that this lease premium was liable for deduction of tax at source failing which the assessee is to be treated as assessee in default. It is the say of the assessee that such lease premium is in the nature of capital expenditure and therefore there is no question of deduction of tax at source. Further, the said lease premium does not come within the purview of the definition of rent as provided u/s. 194-1 of the Act. 10. We have carefully perused the lease deed as exhibited from page-1 to 42 of the Paper Book. A careful reading of the said lease deed transpires that the premium is not paid under a lease but is paid as a price for obtaining the lease, hence it precedes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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