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2012 (8) TMI 525 - AT - Income TaxTDS on rent - demand and interest being raised u/s 201(1) and 201(1A) determining TDS remitted by the assessee on lease rent of Rs. 9 Crores p.a. as against the lease rent of Rs. 6 Crores p.a. paid by the assessee - assessee made provision for 9 crores in books of ccount for lease rentals on ground of non determination of rent at 6 crores or 9 crores in view of differences amongst the members of the land lord's family - added back entire sum of Rs. 9 crores debited to its P/L A/c for year ended 31.03.07 and offered the same to tax - lease agreement dt.1.12.2007, agreed for 6 crores p.a. - assessee reversed the provision for lease rent to the extent of Rs. 3 Crores and remitted the TDS applicable on the actual lease rent of Rs. 6 Crores with interest for delayed remittance Held that:- It is the income which determines the extent or amount of tax to be deducted at source. Income sought to be taxed by taxing statutes is always the real income. In the instant case, it is clear that the lease rent for the relevant period was fixed at Rs. 6 Crores p.a.. Assessee has only claimed Rs. 6 Crores as an expenditure and that too in the period relevant to AY 08-09 when the rent payable was agreed upon. Land lord was also entitled to receive only Rs. 6 Crores as lease rent for the period relevant to AY 2007-08. Contention that TDS ought to be made on Rs. 9 Crores and not on Rs. 6 Crores, is both absurd and untenable. Difference of Rs. 3 Crores on which Revenue is seeking TDS and also interest thereon is not anybody's expenditure or income. Further, contention that following the Mercantile System of Accounting, the lease rent falls due every month by virtue of a contractual obligation and hence the period of delay should be reckoned from the date on which the rent falls due for each of the months, does not hold good as the provision of section 194-I very clearly state that the liability to deduct TDS arises only and only when an assessee makes payment of rent or when the assessee debits rent as an expenditure in the books of accounts, whichever is earlier - Decided in favor of assessee.
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