TMI Blog2012 (8) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 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. - IT Appeal No. 667 (Bang.) of 2010 - - - Dated:- 20-7-2012 - GEORGE GEORGE K, JASON P. BOAZ, JJ. ORDER Jason P. Boaz, Accountant Member This appeal by Revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re passed an order under section 201(1) and 201(1A) of the Act dt.24.3.2009 raising a total demand of Rs. 99,63,360; comprising Rs. 67,32,000 being the demand raised under section 201(1) of the Act and Rs. 32,31,360 being interest charged under section 201(1A) of the Act. 2.3 Aggrieved by the order of the ITO-TDS, the assessee went in appeal before the CIT(A). The main issues of dispute between the assessee and the Department were as under : ( i ) the Assessing Officer, in his order, determined the TDS to be remitted by the assessee on lease rent of Rs. 9 Crores as against the lease rent of Rs. 6 Crores paid by the assessee. ( ii ) the Assessing Officer, in his order, determined and charged the interest on delayed payment of TDS calculated on lease rent of Rs. 9 Crores per annum as against Rs. 6 Crores per annum paid by the assessee. The learned CIT(A) after examining the case and hearing the assessee, disposed off the appeal by order dt.12.3.2010 granting the assessee partial relief. 3. Aggrieved by the order of the CIT(A), Revenue is now in appeal before the Tribunal. In the revised grounds of appeal raised, Revenue has contended as under : "1. The CIT(A) has e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of revenue's contentions. 4.2 Per contra, the learned counsel for the assessee supported the order of the learned CIT(A) and prayed for the same to be upheld. 5. We have heard both parties and have carefully perused and considered the material on record. On this issue, the conclusion of the learned CIT(A) at paras 8.1 and 8.2 of his order reads as follows : "In this regard it has already been noted above that the appellant in its computation of income for Assessment Year 2007-08 had disallowed the amount of Rs. 9,00,00,000 and added back the same to its total income and also paid tax on the full amount of Rs. 9,00,00,000. The said return of income for Assessment Year 2007-08, containing the above computation, was filed on 3.12.2007. Thus, not only was the disallowance of Rs. 9,00,00,000 made suo moto, the same was also made much before the date of survey i.e. 13.3.2009. Similarly in the subsequent year, on finalization of the amount of rent payable by the appellant at Rs. 6,00,00,000, the appellant deducted TDS on the said amount and paid the said TDS along with interest for belated payment on 18.3.2008. The appellant further claimed the said amount as a deduction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be considered for the purpose of determining the TDS to be made under section 194-I and consequential interest under section 201(1A) of the Act. 5.3 The provisions of TDS were introduced in the statute so that tax is collected by Revenue at source on certain types of income. In other words, 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 per annum. The assessee has only claimed Rs. 6 Crores as an expenditure and that too in the period relevant to Assessment Year 2008-09 when the rent payable was agreed upon. The land lord was also entitled to receive only Rs. 6 Crores as lease rent for the period relevant to Assessment Year 2007-08. In this fact situation if one was to contend that TDS ought to be made on Rs. 9 Crores and not on Rs. 6 Crores, such a contention is both absurd and untenable. The difference of Rs. 3 Crores on which Revenue is seeking TDS and also interest thereon is not anybody's expenditure or income. It is neither an expenditure in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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