TMI Blog2011 (5) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... r the building in which the cabin crew training mock-up facility is located; it is more interested in capturing the facility as such in its film - assessee was not liable to deduct tax under section 194-I from the payment of Rs. 7,12,500 made to Air India - Appeal is partly allowed - 2496 AND 2497 (MUM.) OF 2010 - - - Dated:- 18-5-2011 - R.V. EASWAR, R.K. PANDA, JJ. Sanjiv M. Shah for the Appellant. Vijay Shankar for the Respondent. ORDER R.V. Easwar, President ‑ These two appeals have been filed by the assessee against orders passed by the Assessing Officer under section 201(1) and section 201(1A) of the Income-tax Act, 1961, for the assessment years 2003-04 and 2004-05. The appeals arise in the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O Ltd. / Air India for location as hire charges. The appellant has not deducted any tax under the impression that no tax was required to be deducted as such payments were made to a Govt. body. The AO observed that CIDCO/Air India is not a Govt. body but is a undertaking and as such the location charges paid to CIDCO/Air India has been treated as rent and is brought to tax under section 194-I at the rate of 20.6 per cent". 4. The assessee is in further appeal before the Tribunal. The contention of the learned counsel for the assessee is that the amounts paid to CIDCO and Air India did not amount to "rent" within the meaning of Explanation (i) below the section 194-I and therefore the assessee was not under any obligation to deduct tax. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10(20A) of the Act. It was pointed out that the exemption enjoyed by CIDCO was withdrawn by the Finance Act, 2002, with effect from the assessment year 2003-04, which was overlooked by the assessee, who bona fide believed that the exemption continued even for the said assessment year. It was thus pointed out that the lapse was not intentional but was bona fide. 5. The learned CIT DR, on the other hand, contended that a strict interpretation should be adopted in respect of provisions relating to tax deducted at source and that the assessee, unless it had taken care to obtain letters from Air India and CIDCO to the effect that they are not liable to pay tax on their income, was liable to deduct tax from the payments made to them and sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation For the purposes of this section (i) "rent" means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee". The above definition is satisfied in all respects with regard to the payment of Rs. 1,50,000 to CIDCO. The payment was described as "administrative charges" but the section applies to the payment because there was use of land for the purpose of shooting of the film. The definition itself says that if the payment is in truth rent, the fact that the parties call it differently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low the security procedures laid down by Air India strictly. The other letter dated 9-5-2003 is for the schedule of shooting on that date for charges of Rs. 50,000. The shooting was at Air India's booking office at Nariman Point. The conditions are also the same as in the other letter. In both the letters the assessee was required to deposit the amount by demand draft in advance of the shooting. 8. It seems to us that so far as the payment made for the shooting in Air India's booking office at Nariman Point is concerned in the amount of Rs. 50,000, it is for the use of the building together with the furniture and fittings and thus the payment of Rs. 50,000 is nothing but "rent". However, the payment of Rs. 7,12,500 made to Air India for s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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