TMI Blog2017 (4) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... gination, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act, 1961 (the Act ). 2. The grounds of appeal filed by the Revenue read as under:- 1. (i) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the amount paid by the Lessee A. Surti Developers Pvt. Ltd.) to the Lessor (MMRDA) was not in the nature of rent, as defined in the Explanation (i) to section 1941 of the Act for the purpose of deduction of tax at source. (ii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the claim of the assessee that no tax was deductible under section 194I from the payment made by the assessee to MMRDA for acquisition of the plot of land on lease from MMRDA. (iii) On the facts and circumstances of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source on such payment as was required u/s 194I of the Act. In response to the show cause notice u/s 201(1) issued by the AO, the AR of ASDL replied that the said payment was made towards purchase of free FSI viz. premium for area covered by staircase, lift, lobbies and balcony enclosure fee, which is in the nature of capital payment and not rent or lease payment. The AO was not convinced with the said reply of ASDL as in the remarks column of cheque payment voucher, it was mentioned as being pay order drawn in favour of MMRDA towards lease premium for City Survey No. 228 . The AO then held that lease premium of ₹ 60,55,050/- was paid by ASDL for continuous use of land under lease agreement and thus was covered under the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bai vs. Navi Mumbai (SEZ) Private Ltd. (2013) 38 taxmann.com 218, (iii) ITO vs. Dhirendra Ramji Vora (2014 TIOL 188 ITAT Mumbai), (iv) ITO vs. Indian Newspapers Society (2013) 37 taxmann.com 401 and (v) Jt.CIT, Spl.Rg. 25, Mumbai vs. Mukund Ltd. 106 ITD 231 (Mumbai ITAT Special Bench), held that the impugned payment on account of lease premium did not fall within the purview of section 194I. Therefore, the learned CIT(A) allowed the appeal filed by the assessee before him. 5. Before us, the learned DR supports the order passed by the AO u/s 201(1) 201(1A) of the Act. 6. We have heard the learned DR and perused the relevant material on record. The issue in the present appeal is whether the lease premium paid for a long term lease o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re under. In Indian Newspapers Society (supra), 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. 6.1 A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
