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2013 (8) TMI 598 - AT - Income TaxTDS u/s 194I of the Income Tax Act - Lease premium - assessee has capitalized the lease premium in its books of accounts and treated the same as capital expenditure for tax purposes - Assessee in default u/s 201(1) and 201(1A) of the Act for not deducting tax u/s 194-I of the Act of lease premium paid by it - Lease premium paid by assessee to The City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO) for acquiring development and lease-hold rights for a period of 60 years under the Lease Deed(s) is rent within the meaning of section 194-I of the Income Tax Act, 1961 (the Act) and hence liable for deduction of tax at source – Held that:- As per Hon'ble Apex Court in the case of Enterprising Enterprises V/s DCIT [2006 (12) TMI 138 - SUPREME Court], it was held that the assessee which had taken a quarry on lease, the lease rent paid was capital expenditure and the Hon'ble High Court also affirmed the decision of the Tribunal. The Hon'ble Apex Court while confirming the decision of the Hon'ble High Court held that premium for lease or any lumpsum payment for obtaining a lease for a long period is a payment for enduring advantage, so that it is a capital expenditure which is not deductible – In the present case it is held that lease premium paid by assessee to CIDCO is not in the nature of rent as contemplated u/s 194-I of the Act - Provisions of section 194-I of the Act to deduct TDS on the lease premium paid by the assessee is not attracted - Deleted the demand raised by the AO u/s 201(1) and 201(1A) of the Act by rejecting the grounds of appeal taken by the department – Decided against the Revenue.
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