TMI Blog2014 (1) TMI 1497X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in section 194-I of the Act, the assessee was not liable to deduct tax at source from the said payment and hence could not be treated as the assessee in default u/s 201(1) & 201(1A) of the Act – Decided against Revenue. - I.T.A. No. 4523 /Mum/2012 - - - Dated:- 14-8-2013 - Shri P. M. Jagtap, AM And Shri Sanjay Garg, JM,JJ. For the Appellant : Shri Girija Dayal For the Respondent : Shri A. K. Ghosh ORDER Per P. M. Jagtap, A. M. This appeal is preferred by the Revenue against the order passed by the ld. CIT(A) -14, Mumbai dated 27-04-2012 for assessment year 2008-09. 2. Although the Revenue has raised as many as 12 grounds in this appeal, the solitary issue arising out of the same is whether the assessee is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not bear the character of Rent mentioned in Sect. 1941 and therefore there is no requirement of deduction of tax from such payment made to CIDCO. The land under question has been given by the Lessor to the assessee on Lease and for which it has paid the premium of Rs. 70,85,01,870/-. This lump-sum payment made by the Leasee i.e. M/s. Shah Group Builders Ltd. (assessee) has been made to avoid recurring payment by instalments by the them to the Lessor. The payment so made by the assessee is a Rent for enjoyment and occupancy of the impugned land. The one time payment does not change the character of this payment and therefore it squarely falls within the parameter of section 1941. This inference also gathers support from the judicial pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther agreement or arrangement for the use of (either separately or together) any -- (a) land; or (b) to (h) -----" whether or not any or all of the above are owned by the payee" The Assessee conveniently ignored to read the crux of the definition of rent provided in explanation (i) to section 194-I of the Income Tax Act, 1961. The definition has clearly mentioned that the payment made by whatever name called' and 'for the use of' gets covered by the provisions of Section 194- 1 of the Income Tax Act, 1961. As a result, by calling lease rent as lease premium, does not change its real character. The nomenclature used in respect of such lease premium payment is not decisive. Here it is necessary to mention that the Legislature has take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1A) of the Act. The said submissions made on behalf of the assessee before him were forwarded by the ld. CIT(A) to the A.O. for his comments. In the remand report submitted to the ld. CIT(A), the A.O. offered his comments on the submissions made on behalf of the assessee. After considering the submissions made on behalf of the assessee and the comments offered by the A.O. on the said submissions in the remand report as well as the material available on record, the ld. CIT(A) found that a similar issue involving identical facts and circumstances was considered and decided by him in detail vide his order passed in the case of Navi Mumbai SEZ Pvt. Ltd. Accordingly, following the decision in the case of Navi Mumbai SEZ Pvt. Ltd. on a similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought on record 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and directly apply 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". 6. As the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Wadhwa Associates Realtors Pvt. Ltd. (supra) as well as Shree Naman Hotels Pvt. Ltd. (supra) decided by the Tribunal, we respectfully follow the decisions rendered in the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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