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2017 (4) TMI 707 - AT - Income TaxTDS u/s 194I - payment made by the assessee to MMRDA for acquisition of the plot of land on lease from MMRDA - whether the lease premium paid for a long term lease of 60 years can be termed as ‘rent’? - Held that:- In Wadhwa & Associates Realtors Private Limited (2013 (9) TMI 261 - ITAT MUMBAI)the assessee took plot of land from MMRD and made payment of lease premium for allotment of plot of land as also payment for additional built up area and fees for FSI. It is held in the above case that (i) since premium was not paid under lease but was paid as a price for obtaining lease, it preceded grant of lease and, therefore, by any stretch of imagination, it could not be equated with rent which was paid periodically, (ii) payment for additional FSI area could not be equated to rent, and (iii) assessee was not liable to deduct tax at source on both types of payment u/s 194I of the Act. In Navi Mumbai (SEZ) Private Ltd. (2013 (8) TMI 598 - ITAT MUMBAI) it is held lease premium paid by assessee to CIDCO for acquiring leasehold land for a period of 60 years in order to develop a Special Economic Zone (SEZ) amounted to capital expenditure which did not fall within the meaning of ‘rent’ u/s 194I and therefore, the assessee was not liable to deduct tax at source while making the said payment. In Dhirendra Ramji Vora (supra), it has been held by the Tribunal that the lease premium paid to CIDCO does not qualify to be a ‘rent’ within the meaning of section 194I so as to be exigible for deduction of tax at source there under. In Indian Newspapers Society (2013 (9) TMI 158 - ITAT DELHI) the Mumbai Development Authority leased out land in question to the assessee for a period of 80 years for a consideration comprising lease premium of a sum. The AO held that the provisions of section 194I was applicable on such lease payment. The Commissioner (Appeals) having found that such payment was not an advance rent but was a lease payment in the nature of capital expenditure, held that such payment did not fall within the ambit of section 194I of the Act. The Tribunal held that since payment of lease premium was not to be made on periodical basis but it was onetime payment to acquire land with right to construct a commercial complex thereon, section 194I was not applicable. Thus the payment of lease premium does not fall within the ambit of section 194I and, therefore, the assessee is not liable to deduct tax at source while making the said payment - Decided in favour of assessee
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