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TMI Blog2012 (7) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ,456/-. The CIT (A) deleted the addition by holding as under :- "4.2 I have carefully considered the assessment order and the submissions made by the ld. AR in this regard. As per the facts of this case, the appellant company is a 100% subsidiary of the holding company M/s McCann-Erickson (India) Pvt. Ltd. M/s McCann Erickson has taken on rent office premises in Delhi and Mumbai vide separate lease deeds with the landlords. M/s McCann has permitted common use of the above premises by the appellant company. The full rent for the premises have been paid directly by the holding company to the landlords after deducting tax at source u/s 194-I of the Act. During the year under consideration, the appellant has paid Rs. 56,23,456/- to M/s McCann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us by taking the following ground :- "1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 56,23,456/- made by the AO u/s 40(a)(ia) of the IT Act, 1961. The Ld. CIT(A) has not appreciated the fact that for the purpose of section 194-I in the explanation (i) of the said section the 'Rent' means any payment whatever name called under any lease, sub lease, tenancy or any agreement or arrangement for the sue of (either separately or together) any (a) land or (b) building or (c) land appurtenant to building (including factory building) etc. whether or not any or all of the land or building are owned by the payee. Therefore, the' subsidiary company was liable to deduct tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of the rent on the holding company. Since the assessee has not deducted TDS, therefore, provisions of section 40a(ia) read with section 194-I are clearly applicable to the facts of the assessee's case, therefore, Assessing Officer was justified in making the addition and the CIT (A) has wrongly deleted the addition and he prayed to set aside the order of the CIT (A). 5. On the other hand, the ld. AR relied on the order of the CIT (A) and pleaded that this expenditure of Rs. 56,23,456/- was a reimbursement of the rent paid to the holding company. This rent was in respect of two properties located at Delhi and Mumbai. In Delhi, the property was hired by the holding company from CEPCO Industries Pvt. Ltd. As per clause 5 at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Facts remain the same. Therefore, any deviation in revenue's stand shall be a violation of rule of consistency. The intent of the assessee to recognize the transaction as a reimbursement is also evident from the audited accounts and also to the note to tax audit report. Ld. AR also relied on the following decisions:- (i) CIT v. Woodward Governor India Pvt. Ltd. 294 ITR 451 (Delhi) (ii) CIT v. Rajiv Grinding Mills 142 Taxman 567 (Delhi) (iii) CWT v. RKKR International (P) Ltd. 145 Taxman 322 (Delhi) (iv) CIT v. Neo Polypack Ltd. 245 ITR 492 (Delhi) (v) Union of India v. Satish Panna Lal Shah 249 ITR 221 (SC) (vi) Berger Paints India Ltd. v. CIT 266 ITR 99 (SC) Ld. AR submitted that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Pvt. Ltd. also provide in clause 7 (d) as under:- "d. Not to sub-let or give on leave and license basis or on any other basis the Licensed Premises or any portion thereof, nor permit any third party to use and occupy the Licensed Premises or any portion thereof save and except to its subsidiaries, affiliates, group entities, associates, which shall be without any prior written consent of the Licensor." The assessee is paying rent to the holding company as reimbursement since last many years. This position has been accepted by the department all through and it has been never disputed even when provisions for TDS were on statute since 1994. Section 194-I of the Income-tax Act, 1961 was inserted in Act w.e.f. 01.06.1994. Similarly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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