CHIEF ACCOUNTS OFFICER Vs. THE INCOME TAX OFFICER
LAWS(IT)-2014-11-4
INCOME TAX APPELLATE TRIBUNAL
Decided on November 14,2014

Chief Accounts Officer Appellant
VERSUS
THE INCOME TAX OFFICER Respondents

JUDGEMENT

N.V.Vasudevan, Member (J) - (1.) THESE are appeals by Chief Accounts Officer, Bruhat Bangalore Mahanagara Palike [hereinafter referred to as "BBMP" or "assessee"] against a common order dated 5.3.2014 of CIT(Appeals) -V, Bangalore ["CIT(A)"] confirming the orders dated 27.3.2013 passed by the ITO (TDS), Ward -16(1), Bangalore, ["AO"] treating BBMP as an "Assessee in Default" for not deducting at source u/s. 201(1) of the Income Tax Act, 1961 ["the Act"] and also levying interest on BBMP u/s. 201(1A) of the Act on the tax that ought to have been deducted and paid to the credit of the Central Government. The appeals relate to assessment years 2010 -11 & 2011 -12.
(2.) THE municipal governance of Bangalore vested with the Corporation of the City of Bangalore in 1949, under 'The City of Bangalore Municipal Corporation Act, 1949 (Mysore Act LXIX of 1949)' which stood repealed by Sec. 507 of the Karnataka Municipal Corporations Act, 1976 (KMC Act) and continues to be governed by KMC. The Corporation was renamed as Bangalore Mahanagara Palike (BMP). New areas in the vicinity of the city of Bangalore also came under the control of BMP and BMP came to be renamed as Bruhat Bangalore Mahanagara Palike. Bbmp in discharge of its functions under the KMC has to acquire land for expansion of existing roads or for construction of underpass etc. There are two modes in which it can achieve its purpose. (i) It can compulsorily acquire lands subject to existence of Public Purpose, payment of due compensation and complying with the other procedure requirements under the Land Acquisition Act, 1894; and (ii) by virtue of the powers conferred under the provisions of Sec. 14 -B of the Karnataka Town and Country Planning Act, 1961, ["KTCP"] as local authority, it can by public notice inform the public purpose for which lands are required, mentioning the location of the land which are required for public purpose and call upon the owners of those lands to avail the benefit of getting DRC's (Development Right's Certificate) in lieu of land that are surrendered of their land. The owner of any site or land which falling within the area so mentioned can surrender the required area to Bbmp free of cost and hand over possession free of encumbrances. Bbmp will permit development rights in the form of additional floor area which shall be equal to one and half times of the area of land surrendered. The development right so permitted may be utilised either at the remaining portion of the area after the surrender or anywhere in the local planning area, either by owner himself or by transfer to any other person, as may be prescribed. The area remaining after surrender shall have the same floor area which was available before surrender for the original site or land as per regulations. Sec. 14 -B of KTCP reads thus: "14 -B. Benefit of development rights. - Where any area within a local planning area is required by a Planning Authority or local authority for public purpose and the owner of any site or land which comprises such area surrenders it free of cost and hands over possession of the same to the Planning Authority or the local authority free of encumbrances, the planning authority or the local authority, as the case may be, may notwithstanding anything contained in this Act or the regulations but subject to such restrictions or conditions as may be specified by notification by the State Government, permit development rights in the form of additional floor area which shall be equal to one and half times of the area of land surrendered. The development right so permitted may be utilised either at the remaining portion of the area after the surrender or anywhere in the local planning area, either by himself or by transfer to any other person, as may be prescribed. The area remaining after surrender shall have the same floor area which was available before surrender for the original site or land as per regulations. Explanation. - For the purpose of this section, - (a) Public purpose means. - (i) widening of an existing road or formation of a new road; (ii) providing for parks, playgrounds and open spaces or any other civic amenities; (iii) maintaining or improving heritage building or precincts notified by the State Government. (b) "development right" means the right to carryout development or to develop land or building or both. Illustration No. 1 In a plot area of 500 square meters at road "A", where floor area ratio is 1.5 - i Plot area : 500 square meters ii Permissible floor area ratio : 1.5 iii Buildable floor area : 500 x 1.5 = 750 square meters iv Area surrendered :100 square meters v Additional floor area in the form of Development Rights: 150 square meters vi Plot area after surrender : 500 -100 = 400 square meters vii Buildable floor area in plot area of 400 square meters (after surrender): - (a) If additional floor area is not utilised in the same plot : 750 Sq. Mtrs. (b) If additional floor area is utilised in the same plot : 750 + 150 = 900 square meters Illustration No. 2 In a plot area of 500 square meters at road "B", where floor area ratio is 0.75: - i Plot area : 500 square meters ii Permissible floor area ratio : 0.75 iii Buildable floor area : 500 x 0.75 = 375 square meters iv Area surrendered : 100 square meters v Additional floor area in the form of Development Rights : 150 square meters vi Plot area after surrender : 500 -100 = 400 square meters vii Buildable floor area in plot area of 400 square meters (after surrender): - (a) If additional floor area is not utilised in the same plot (b) If additional floor area is utilised in the same plot : 375 square meters : 375 + 150 = 525 square meters Illustration No. 3 In a plot area of 500 square meters at road "C", where floor area ratio is 0.75 and Development Right of 150 square meters originated at road "A" is transferred. - i Plot area : 500 square meters ii Permissible floor area ratio : 0.75 iii Buildable floor area : 500 x 0.75 = 375 square meters iv Additional floor area transferred from road "A" : 150 square meters v Total Buildable floor area : 375 + 150 = 525 square meters."
(3.) DURING the previous year relevant to AYs 10 -11 & 11 -12, the owners of the extent of land situate in the various areas as set out in the Annexures I & II to this order surrendered their holdings free of cost.;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.