9911796707
TMI Blog2015 (8) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... tter needs to be re-examined in the light of the provisions of Section 2(47) read with Explanation (i) to Section 194-I of the Act. This Tribunal is of the considered opinion that the nature of the transaction could be ascertained only after going through the lease agreement said to be executed by the assessee and Tamil Nadu Industrial Development Corporation. Accordingly, the orders of the lower authorities are set aside. The entire issue is remitted back to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes - ITA No. 699/Mds/2014 - - - Dated:- 19-6-2015 - N. R. S. Ganesan, JM And A. Mohan Alankamony, AM,JJ. For the Appellant : Shri R Vijayaraghavan, Adv. For the Respondent : Dr S Moharana, CIT ORDER Per N R S Ganesan: This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-VII, Chennai, dated 28.02.2014 and pertains to assessment year 2009-10. 2. Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, submitted that the Assessing Officer found the assessee as assessee in default under Section 201(1) of the Income-tax Act, 1961 (in short 'the Act') and levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act treating the assessee as assessee in default was passed on 03.10.2013. The assessee has claimed that the statement under Section 200 of the Act was filed for the first quarter on 15th July, 2008. Therefore, the Assessing Officer ought to have passed the order on or before 31.03.2011. The fact remains that the assessee revised itself the statement filed under Section 200 of the Act by way of correction on 18th August, 2011. The Assessing Officer may not be in a position to consider the revised statement filed by the assessee on or before 18.08.2011. Therefore, the date of filing of the statement for all practical purposes has to be taken as 18th August, 2011. If the date of filing of statement is taken as 18.08.2011, then the impugned order is within the period of time limit as provided under Section 201(3) of the Act. Therefore, this Tribunal is of the considered opinion that the order passed by the Assessing Officer under Section 201(1) of the Act is not barred by limitation. 5. Now coming to the merit of the appeal, Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, submitted that the assessee is a joint venture with the object of development of Special Econo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Inspite of that, the Bombay High Court found that the revenue authorities have to exercise their power to declare the assessee as assessee in default within a reasonable time. Since no limitation was prescribed, the Bombay High Court found that the order passed by the Assessing Officer beyond four years was barred by limitation. The Ld.counsel has also referred to the decision of this Bench of the Tribunal in Foxconn India Developer (P) Ltd. v. ITO [I.T.A. No.492/Mds/2010 dated 30.04.2012] and submitted that on identical circumstances, this Tribunal found that the upfront fee paid by the assessee would fall within the definition of rent as provided under Explanation to Section 194-I of the Act. Therefore, this Tribunal found that the assessee is liable to deduct tax at source. However, by placing reliance on the judgment of Apex Court in Hindustan Coca Cola Beverages Pvt. Ltd. v. CIT (2007) 293 ITR 226, the Ld.counsel submitted that the recipient has already paid the tax. Therefore, at the best, the Department could recover interest till the payment of tax by the recipient. 7. On the contrary, Dr. S. Moharana, the Ld. D.R. submitted that on identical circumstances, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase and annual payment made by the assessee to the lessor was payment of rent, therefore, it was allowable as revenue expenditure. In view of the Calcutta High Court judgment in Braithwaite Co.(India) Ltd. (supra), according to the Ld. D.R., the assessee is liable to deduct tax while making payment. 8. The Ld. Departmental Representative further submitted that the contention of the assessee is that the transaction amounts to sale of the property is not tenable. According to the Ld. D.R., the so-called upfront fee paid by the assessee was duly escalated and additional sum of ₹ 1000 per acre per annum has to be paid during the lease period. The upfront rent is nothing but an advance payment of lease rent. In addition to that, ₹ 25,000/- per acre per annum was also collected towards the lease rent. Referring to Section 2(14) of the Act, the Ld. D.R. pointed out that the definition in Section 2(14) is inclusive one and not exhaustive. Section 2(45) of the Act defines total income computed in the manner laid down under the provisions of the Income-tax Act. Referring to Section 194-I of the Act, the Ld. D.R. submitted that the payment of rent for land is subject to ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or consideration before the Tribunal is whether the payment of ₹ 1412.80 Crores made by the assessee to Tamil Nadu Industrial Development Corporation is a capital payment for acquiring the land to the extent of 25.27 acres of land or it is a lease rent? The assessee claims that even though the lease period was 99 years, the payment made by the assessee is only for acquiring the property. Accordingly, the assessee claims that it was a purchase of property, hence, what was paid by the assessee is a capital amount for acquiring the land. The contention of the Revenue is that the amount paid by the assessee is only a lease rent for using the land, therefore, tax has to be deducted under Section 194-I of the Act. To appreciate the contentions made by the parties before the Tribunal, it is necessary to go through the copies of the lease agreement entered into between the parties. During the course of hearing, it was pointed out to the Ld.counsel for the assessee that the copies of the lease agreement said to be entered into between the assessee and Tamil Nadu Industrial Development Corporation is not available on record of this Tribunal. The Ld.counsel submitted that a copy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) considered this identical issue and found that the assessee is liable to deduct tax on the lease rent in view of Explanation (i) to Section 194-I of the Act. However, after referring to judgment of Apex Court in Hindustan Coca Cola Beverages P. Ltd. (sulpra), this Tribunal found that since the payee has paid taxes, there cannot be any doubt that TDS could not be recovered from the assessee. However, the assessee is liable to pay interest under Section 201(1A) of the Act till the payment was made by the recipient. 12. Since copy of the lease agreement between the assessee and Tamil Nadu Industrial Development Corporation is not available before us, we are unable to express our opinion on the nature of transaction whether, it was an advance payment of rent or cost of acquisition of the land could be decided after going through the so15 called lease deed executed by the assessee and TIDCO. Moreover, the matter needs to be re-examined in the light of the provisions of Section 2(47) read with Explanation (i) to Section 194-I of the Act. This Tribunal is of the considered opinion that the nature of the transaction could be ascertained only after going through the lease agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
