TMI Blog2015 (11) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2011-12. 2. The grounds raised by the Revenue are as under : 1. The Ld.CIT (Appeals) erred in deleting the demand raised of ₹ 74,67,727/- u/s 201(1)/201(1A) of the Income Tax Act, 1961 in respect of lease premium payment paid to Pimpri Chinchwad New Township Development Authority (PCNTDA). 2. The Ld.CIT (Appeals) erred in considering the fact that the premium paid to PCNTDA is upfront payment as pre-condition for entering into lease agreement. 3. The Ld.CIT (Appeals) erred in not appreciating the fact that the deed entered into by the deductor with PCNTDA was not a transfer deed but a lease deed and explanation to section 1941 clearly stipulates that any payment by whatever name called under any lease deed/agreement is to be taken as rent for TDS purpose. 3. The appellant craves leaves to add, alter or amend any or all the grounds of appeal. 3. Facts of the case, in brief, are that the assessee is the proprietor of Sea Face Beach Resort, Polly House, Shri Samarth Engineering Company businesses. During the course of TDS verification in the case of Pimpri Chinchwad New Town Development Authority (PCNTDA) on 07-11-2012 it was noted that the assessee had ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Township Development Authority (PCNTDA). In the facts of the case before us, the assessee had entered into 99 years lease agreement through its Chairman with PCNTDA for using 3261 sq. mtrs. of land located on Plot No.1, in Sector 13, Chikhali, Taluka Haveli, Pune. The said land was to be used for education purposes as per clause (N) of the lease deed. The assessee paid lease premium of ₹ 1,37,36,963/- for the said plot and further agreed to pay sum of ₹ 100/- per annum for the entire period of lease. The Assessing Officer (TDS) was of the view that the assessee was required to deduct tax at source under section 194 I of the Act at the time of payment of lease premium to PCNTDA. The Assessing Officer issued a show cause notice to the assessee and also issued summons to the deductor. In reply, the assessee explained that the transaction between it and PCNTDA was a transaction of sale and further appropriate tax return had been filed by it. The Assessing Officer was of the view that the transaction between the parties was not that of transfer, but of lease and there was no transfer of ownership of the property, but the same was leased for use either for commercial or resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in Navi Mumbai SEZ(P) Ltd in ITA No.738 to 7741/Mum/2012, relating to assessment years 2006-07 to 2009-10, vide order dated 12.08.2013, in order to hold that the payment of lease premium to PCNTDA being a pre-condition for entering into lease agreement, could not be said to be paid under the terms of lease agreement. Further, stamp duty had been paid on the market value of the plot represented by lease premium. In view thereof, the Assessing Officer was directed to delete the demand created under sections 201(1) and 201(1A) of the Act. 7. The issue arising in the present appeal is squarely covered by the ratio laid down by the co-ordinate Bench of the Tribunal in ITO Vs. Camp Education Society (supra), wherein it was held as under:- 6. We have heard the rival contentions and perused the record. The assessee was an educational society registered under section 12A of the Act. The assessee was running various schools and colleges in the city of Pune. During the year under consideration, in order to establish another school in Pimpri Chinchwad area, the assessee in reply to an advertisement by PCNTDA, applied for a plot on leasehold basis. As per the Bid document, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in that case issue in question was upfront payment and not lease premium. Further, upfront payment was part of consideration for acquiring leasehold rights unlike the present case where payment of lease premium was pre-condition for entering into lease agreement and therefore the facts of the case were clearly distinguishable. Further reliance was placed on the series of decisions, under which such similar payment of lease premium was held to be not subject to deduction of tax at source under section 194I of the Act. 9. We find that similar issue of payment of lease premium arose before the Mumbai Bench of the Tribunal in the case of Navi Mumbai SEZ (P) Ltd. in ITA Nos.738 to 740/Mum/2012 for assessment years 2006-07 to 2009-10, wherein the Tribunal in its order dated 12.08.2013, held that lease premium paid by the assessee to the City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO) for acquiring development and leasehold rights for a period of 60 years, was not required to be subject to deduction at source under section 194I of the Act. Further another Bench of the Mumbai Tribunal in the case of M/s. Wadhwa Associates in ITA No.695/Mum/2012, vide order da ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
