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Dy. Commissioner of Income Tax Versus Lodha Crown Build Mart Pvt. Ltd.

2015 (12) TMI 28 - ITAT MUMBAI

TDS u/s 194I - non deduction of TDS - assessee in default - agreement of lease and the nature of payment of rent - CIT(A) deleted the disallowance - Held that:- The Tribunal has been taking a consistent view after taking into consideration the agreement of lease and the nature of payment and also the scope and ambit of definition of "rent" as given in section 194I, that no TDS is required to be deducted on such a premium paid for acquisition of rights in the land taken by way of lease from MMRDA .....

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st impugned order dated 11.02.2014, passed by CIT(A)-14, Mumbai in relation to the order passed u/s 201(1)/201(1A) for the assessment year 2011-12, vide which following grounds have been raised :- "(i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the amount paid by the Lessee (Lodha Crown Buildmart Pvt Ltd) to the Lessor (MMRD) was not in the nature of rent, as defined in the Explanation (i) to section 194I of the Act for the purpose .....

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fault u/s 201(1) in respect of the amount of tax which has not been deducted under section 194I form the payment made to MMRDA and levying interest under section 201(1A). (iv) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the definition of rent, as contained in section 194I and in restoring to interpretative reasoning whereas as per the settled principle of jurisprudence, this exercise is required only when the law is unclear. (v) On the facts .....

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in the aforesaid appeal is covered by series of Tribunal decisions in various cases, wherein it has been consistently held that payment of lease premium paid to MMRDA towards acquiring rights and use of land is not covered under definition of rent, within the section 194I and, therefore, assessee is not required to deduct TDS on such payment and, therefore, assessee cannot be treated as assessee in default u/s 201 and consequently no liability for interest 201(1A). 3. Brief facts are that, duri .....

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ctively. The AO held that, the said payments were in the nature of lease rent on which assessee has not deducted tax at source hence there was contravention of provisions of section 194I. 4. Before the AO, the assessee has made a very detailed submission that amount of one time lease payment was in the nature of premium for acquiring the rights in respect of the plots and it was not in the nature of rent as contemplated u/s 194I. The assessee s submissions in this regard has been dealt in detail .....

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) in para 4.2. The Ld. CIT(A) held that, the premium is not paid under any lease but was made upon granting of rights and allotment of plot as it was considered a payment for acquisition of land rights and not merely a payment of rent for the use of the land. The amount charged was as per the stamp duty ready recokner, therefore, such a premium paid is capital in nature and not a rent as contemplated u/s 194I. After following the decision of ITAT Mumbai Bench in the case of M/s. Wadhwa Associate .....

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