TMI Blog2013 (9) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... er u/s. 43 r.w. Sec. 37(1) of the Maharashtra Town Planning Act 1966, MRTP Act and other powers enabling the same has approved the proposal to modify regulation 4A(ii) and thereby increased the FSI of the entire 'G' Block of BKC. The Development Control Regulations for BKC specify the permissible FSI. Pursuant to such provisions, the assessee became entitled for additional FSI and has further acquired/purchased the additional built up area for construction of additional area on the aforesaid plot. Thus the assessee has made payment to MMRD under Development Control for acquiring leasehold land and additional built up area - Following decision of Commissioner of Income-Tax Versus Khimline Pumps Ltd. [2002 (9) TMI 94 - BOMBAY High Court] - pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has failed to deduct tax at source , the AO issued show cause notice dt. 21.2.2011 to the assessee. The assessee explained that it has entered into a lease agreement with M/s. MMRD on 22.11.2004. The land under question has been given by the lesser i.e. MMRD to the assessee on lease and for which the assessee has paid the premium amounting to Rs. 949.91 crores approximately. 3.1. After considering the submissions made by the assessee in the light of certain judicial decisions, the AO arrived at the conclusion that the assessee was required to deduct tax u/s. 194-I and pay it to the Government treasury within the stipulated time as required by provisions of Chapter XVII-B of the I.T. Act and as the assessee has not complied with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions relied upon by the AO of Hon'ble Calcutta and Karnataka High Court and observed that both the decisions pertain to the same issue i.e. whether lease premium was a revenue or a capital expenditure. The ld. CIT(A) also discussed the decision in the case of Raja Bahadur Kamakshya Narain Singh of Ramgarh v. Commissioner of Income-tax 11 ITR 513 PC wherein it has been held that the payment which under the lease is exigible by the lesser may be classed under 3 categories (1) Premium or salary (2) the minimum royalty and (3) the royalty per ton . The salamy have been rightly treated as capital receipt. It is a single payment made for the acquisition of the right of the lessees to enjoy the benefits granted both by the lease. The Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to the conclusion that in none of these cases, the issue of 'lease premium as in the case of the assessee vis- -vis 'rent' has been considered. At para 5.41 of his order at page-54, the Ld. CIT(A) says that "I have also considered the other cases relied upon the AO. These cases lay down general principles of interpretation of Law. I find that none of the above cases the court has held that the lease premium in similar circumstances is in the nature of advance rent and hence liable for deduction of TDS u/s. 1941 of the Act. The cases relied upon by the AO are thus distinguishable on facts and in law and the same cannot be made applicable to the facts of the present case where the issue raised is completely different." 5.3. The Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd in the form of paper Book and the judicial decisions relied upon by the rival parties. The entire grievance revolves around the premium paid by the assessee to M/s. MMRDA Ltd. for the leasehold rights acquired by the assessee through the lease deed dt. 22nd November, 2004. It is the say of the Revenue that this lease premium was liable for deduction of tax at source failing which the assessee is to be treated as assessee in default. It is the say of the assessee that such lease premium is in the nature of capital expenditure and therefore there is no question of deduction of tax at source. Further, the said lease premium does not come within the purview of the definition of rent as provided u/s. 194-1 of the Act. 10. We have carefully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply on the facts of the case wherein the Hon'ble Jurisdictional High Court has held that payment for acquiring leasehold land is a capital expenditure. Considering the entire facts in totality in the light of the judicial decisions vis- -vis provisions of Sec. 194-1, definition of rent as provided under the said provision, we do not find any reason to tamper or interfere with the findings of the Ld. CIT(A) which we confirm. 11. In the result, the appeal filed by the Revenue is dismissed. C.O. No. 06/Mum/2013 13. As we have decided that the assessee is not liable to deduct tax at source in Revenue's appeal in ITA No. 695/M/2012, the cross objection raised by the assessee become otiose. 14. In the result, the appeal filed by the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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