TMI Blog2016 (3) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... are directed against the separate orders dated 25-08-2014 and 06-08-2014 respectively of the CIT(A)-V, Pune relating to Assessment Year 2011-12. Since identical issues are involved in both the appeals, therefore, both the appeals were heard together and are being disposed of by this common order. 2. Despite service of notice on the above assessees none appeared on their behalf nor any petition was filed seeking adjournment of the cases. Hence, we proceed to decide the appeals on the basis of material available on record and after hearing the Ld. Departmental Representative. ITA No.2015/PN/2014 (M/s. Patil Hospital) : 3. Facts of the case, in brief, are that the assessee is a partnership firm. It had entered into a 99 year lease agreement with Pimpri Chinchwad New Township Development Authority (PCNTDA in short) within village limits of Chikhali, Taluka Haveli, Pune. The assessee has paid land lease premium of ₹ 73,77,700/- and agreed to pay a sum of ₹ 100/- per annum for the entire period of lease. The AO after examining the provisions of section 194I of the I.T. Act as well as terms of lease deed entered into between the assessee and PCNTDA was of the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments advanced by the Ld. Departmental Representative and perused the material available on record. We find identical issue had come up before the Pune Bench of the Tribunal in the case of ITO (TDS)-3, Pune Vs. Shri Ajay N. Yerwadekar vide ITA No.636/PN/2014 order dated 14-08-2015. We find the Tribunal in the said decision has held as under : 6. After hearing both the sides, we find an identical issue had come up before the Tribunal in the case of ITO Vs. Preetam Medical Foundation Research Centre vide ITA No.190/PN/2014 order dated 16-01-2015 wherein similar demand u/s.201(1) 201(1A) was raised by the AO in respect of lease premium paid to PCNTDA. The CIT(A) deleted such demand and on appeal filed by the Revenue, the Tribunal dismissed the appeal filed by the Revenue by holding as under : 5. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to the demand raised under sections 201(1) and 201(1A) of the Act in respect of the lease premium paid to Pimpri Chinchwad New Township Development Authority (PCNTDA). In the facts of the case before us, the assessee had entered into 99 years lease agreement t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced the preliminary clause of the lease agreement at page 7 of the appellate order, which are not being reproduced for the sake of brevity. The CIT(A) thus, held that the payment of lease premium of ₹ 1,37,36,963/- was a pre-condition for entering into the lease agreement and the same was not under the lease deed, therefore, the payment of lease premium fell outside the purview of definition of rent as provided under section 194I of the Act. It was further pointed out by the CIT(A) that there is no merit in the reliance placed upon the decision of Chennai Bench of the Tribunal in Foxconn India Developer (P) Ltd. Vs. ITO (TDS) (supra) as the same was distinguishable on facts. In the facts of the case before the Tribunal, the issue in question was upfront payment of lease and further the said upfront payment was part of the conditions for acquiring leasehold rights, unlike the present case where, the payment of lease premium was a pre-condition for entering into a lease agreement. The CIT(A) placed reliance on the decision of Mumbai Bench of 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 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on such lease rent payment to PCNTDA. Reliance was placed on the ratio laid down by the Chennai Bench of the Tribunal in Fox Conn India Developer (P) Ltd. (supra). The assessee was held to be in default for non-deduction of tax on source under section 194I of the Act on the lease premium paid to PCNTDA and demand under section 201(1) of the Act was raised and interest under section 201(1A) of the Act was charged, raising a demand of ₹ 22,90,585/-. 8. The CIT(A) vide para 8 referred to the preliminary clauses of the agreement entered into between assessee and PCNTDA and pointed out that the lease premium finds mention in the Lease Deed but the said payment of lease premium was a pre-condition for entering into lease agreement. The CIT(A) thus, held that same was not under the lease deed and the payment of lease premium falls outside the purview of definition of rent as specified in section 194I of the Act. The CIT(A) further observed from the ratio laid down in the case of Fox Conn India Developer (P) Ltd. (supra) was distinguishable on the facts as in that case issue in question was upfront payment and not lease premium. Further, upfront payment was part of considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in lieu of rent as envisaged under section 194 I of the Act. In addition, the assessee had paid stamp duty on the market value of the plot represented by the lease premium and the said finding of the CIT(A) having not been controverted by the learned Departmental Representative for the Revenue, we find no merit in the appeal filed by the Revenue. Accordingly, we uphold the order of CIT(A) and dismiss the grounds of appeal raised by the Revenue. 7. Since the facts of the instant case are identical to the facts of the case decided by the Tribunal in the case of Preetam Medical Foundation Research Centre (Supra), therefore, respectfully following the decision of the Coordinate Bench of the Tribunal and in absence of any contrary material brought to our notice we find no infirmity in the order of the CIT(A) deleting the demand raised u/s.201(1)/201(1A) of the I.T. Act in respect of lease premium paid to PCNTDA. Accordingly, the order of the CIT(A) is upheld and the grounds raised by the Revenue are dismissed. 7. Since the facts of the instant case are identical to the facts of the case decided by the Tribunal in the case of Shri Ajay N. Yerwadekar (Supra) to which b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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