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2020 (11) TMI 101 - HC - Income TaxTDS u/s 194I - payments made by Assessee to M/s.SIPCOT Ltd for payment of land as in the nature of rent - lump sum payment - applicability of provisions of Section 201(1A) - HELD THAT:- As in the case of Foxconn India Developer (P.) Ltd. [2016 (4) TMI 314 - MADRAS HIGH COURT] in which has held that such lump sum payment made by the Assessee for getting a long term lease does not amount to payment of rent and the same is not adjustable against the annual rent payable by the Assessee and therefore, the provisions of Section 194I of the Act will not apply to such circumstances. The said judgment of the Division Bench of this Court has since been accepted by the Central Board of Direct Taxes which has issued CIRCULAR NO.35/2016 [F.NO.275/29/2015-IT (B)], DATED 13-10-2016, holding that the Assessee is not entitled to deduct any tax at sources in such circumstances. Thus lump sum lease premium or one-time upfront lease charges, which are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any other property are not payments in the nature of rent within the meaning of section 194-I of the Act. Therefore, such payments are not liable for TDS under section 194-I - Decided in favour of assessee.
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