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The Income-tax Officer (TDS) -3, Pune Versus V.P. Town Planners

2016 (6) TMI 528 - ITAT PUNE

TDS u/s 194I - non deduction of tds on lease premium paid to Pimpri Chinchwad New Township Development Authority (PCNTDA) - demand raised under section 201(1) and 201(1A) - Held that:- The issue arising in the present appeal before us is identical to the issue before the Tribunal in ITO vs. Camp Education Society (2014 (10) TMI 902 - ITAT PUNE) 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 PCN .....

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: 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 learned Commissioner of Income Tax (Appeals) erred in deleting the demand raised of ₹ 36,25,116/- u/s 201(1) / 201(1A) of the Income Tax Act, .....

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section 194I clearly stipulated that any payment by whatever name called under any lease deed / agreement is to be taken as rent for TDS purpose. 3. The learned Authorized Representative for the assessee at the outset pointed out that the issue raised in the present appeal is squarely covered by various orders of Tribunal. 4. The learned Departmental Representative for the Revenue put forward his contentions. 5. The issue raised in the present appeal vis-a-vis is the demand raised under section .....

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elopment 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 sectio .....

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nted by lease premium, therefore, the demand raised under section 201(1) and 201(1A) of the Act by the Assessing Officer was directed to be deleted. 8. The Revenue is in appeal against the order of CIT(A). 9. We find that similar issue whether tax should be deducted at source under section 194I of the Act and for such non-deduction of tax at source demand should be raised under section 201(1) of the Act and interest under section 201(1A) of the Act is chargeable in respect of lease premium paid .....

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ri Chinchwad area, the assessee in reply to an advertisement by PCNTDA, 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 Tende .....

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assign the leasehold rights. The Lease Deed authorizes the assessee to build / construct any building on the said plot of land. The case of the assessee was that the payment of premium was a precondition for obtaining the lease rights and it was only after payment of the lease premium, the lease agreement was entered into and bundle of rights were obtained by the assessee. 7. The Assessing Officer held the assessee to be default in respect of the TDS payable on such lease rent payment to PCNTDA .....

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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) wa .....

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eduction 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 .....

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