TMI Blog2016 (6) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... 4I of the Act and the Assessing Officer was not justified in raising the demand under section 201(1) of the Act and charging interest under section 201(1A) of the Act. - Decided in favour of assessee. - ITA No. 1372/PN/2015 - - - Dated:- 30-5-2016 - Ms. Sushma Chowla, JM And Shri Pradip Kumar Kedia, AM For the Appellant : Shri Anil Chaware For the Respondent : Shri Ashok Kumar N. Pagariya ORDER Per Sushma Chowla, JM This appeal filed by the Revenue is against the order of CIT(A)-10, Pune, dated 06.08.2015 relating to assessment year 2011-12 against order passed under section 201(1)/201(1A) of the Income-tax Act, 1961 (in short the Act ). 2. The Revenue has raised the following grounds of appeal:- 1. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease premium of ₹ 3,62,51,168/- was paid during the year under consideration. During the course of TDS verification in the case of Pimpri Chinchwad New Township Development Authority (PCNTDA) on 07.08.2012, it was noted that the assessee had entered into lease agreement for 99 years with PCNTDA on the terms and conditions laid down by the lessor in the lease deed dated 27.07.2011 for plot No.SDC 1/1 in Sector No.40 within the village limits of Ravet, Taluka Haveli, Pune. The Assessing Officer was of the view that as per the lease deed, the premium paid for acquisition of leasehold rights for 99 years was nothing but rent and hence, the provisions of section 194I of the Act were applicable. Accordingly, he raised the demand under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NTDA, applied for a plot on leasehold basis. As per the Bid document, where the Bid quoted by a party accepted, the said party was required to pay the quoted amount i.e. the premium within 3 months of the letter of allotment. In case such premium was not paid within period of 3 months, 25% of the Tender deposit was to be fortified and balance amount was to be refunded without any interest. The Tender document stated that the Tender was for the purpose of sale of reserved plots and as per the document full premium was to be paid to PCNTDA and lease agreement would be entered with the party. The assessee entered into a lease agreement with PCNTDA for 99 years and the lease rent was ₹ 100/- per annum for the period of 99 years. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee is outside the purview of section 194I of the Act and the Assessing Officer was not justified in raising the demand under section 201(1) and 201(1A) of the Act. The grounds of appeal raised by the Revenue are thus, dismissed. 10. The issue arising in the present appeal before us is identical to the issue before the Tribunal in ITO vs. Camp Education Society (supra) and following the same parity of reasoning, we hold that the assessee is not liable to deduct tax at source out of the lease premium payments paid to PCNTDA. Accordingly, we uphold the order of the CIT(A) in holding that the lease premium paid by the assessee was outside the purview of section 194I of the Act and the Assessing Officer was not justified in ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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