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2019 (8) TMI 569 - HC - Income TaxProportionate allowability of lease premium u/s 37 - five years lease deeds - advance payment of rent OR capital expenditure - depressed rent - HELD THAT:- Special Bench of the Tribunal in JCIT VERSUS MUKUND LTD. [2007 (2) TMI 358 - ITAT MUMBAI] gave its view regarding advance payment of rent to be capital expenditure on findings, inter alia, that there was termination clause, by which premature termination did not provide for refund of premium, claimed to be advanced rent, there was no clause in the agreement to show that the amount paid by the assessee as advance rent for all future years and the lump sum payment of future years rent had been paid to avail some concession for advance payment of rent or for some other business consideration. It is clear from our perusal of terms of leases between assessee and its lessors, such terms are not there between them. We are unable to appreciate that fact of rent being depressed rent can only be appreciated as such if there is recital about it in the lease rent. That substantial amount of money was paid as premium, claimed and shown by assessee to be advance rents and where rents reserved are as above, it follows there was no contention raised before the Tribunal regarding the rents reserved corresponding to market rate of rent. We have no hesitation to infer that rents reserved are depressed rents. Finding by the Tribunal that assessee’s agreements are exactly similar with the agreements before Special Bench, considered and dealt with in Mukund Ltd. (supra) is perverse as based on no material or contrary to material before it. - for reasons aforesaid we answer the question in the affirmative and in favour of assessee.
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