TMI Blog2017 (5) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... n the nature of rent within the meaning of Section 194-I and therefore the Assessee need not deduct TDS - appeal dismissed - decided against Revenue. - ITA NO.4421/MUM/2015, ITA NO.4422/MUM/2015 - - - Dated:- 26-4-2017 - SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI C.N.PRASAD, JUDICIAL MEMBER For The Appellant : Shri A.K.Nayak For The Respondent : Shri Manish Desai ORDER PER C.N.PRASAD [J.M.] These two appeals are filed by Revenue for the assessment years 2010-11 and 2011-12 against the order of the Ld. CIT (Appeals) -59, Mumbai dated 11.05.2015. 2. The common grounds of appeal in both these appeals filed by the Revenue are as under : (i) On the facts and in the circumstances of the case and in law, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 245, where it has been held that the persons who are responsible for deduction of tax at source are not concerned with the ultimate result of assessment. 2. The appellant craves leave to add, amend, alter or modify any ground which may be necessary at the time of hearing of the case or thereafter. 3. The order of the CIT(A)being erroneous be set aside and A.O s order be restored. 3. The issue in both these appeals is regarding non deduction of TDS on the premium paid to MMRDA by the Assessee for additional FSI. The Assessing Officer treated the premium paid by the Assessee as akin to rent and therefore since the Assessee failed to deduct TDS u/s 194-I of the Act he held the Assessee as defaulter u/s 201(1) and also charged int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under : 5. We have heard the rival submissions, perused the orders of the authorities below and the decisions relied on. The assessee entered into a lease agreement with MMRDA by participating in public tender announced by MMRDA for acquiring a plot in BKC region and paid premium as a price for obtaining the lease for a period of 8 years. After acquiring the right to hold the property for a period of 8 years, assessee started construction of building. In the course of construction of building, there are certain areas of construction like staircase, lifts, lift room, lobbies etc. which consumes spaces and as per the rules, assessee can pay some charges/premium to the concerned authority i.e. MMRDA and can construct above areas free of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the cited decisions. The facts of Shree Naman Developers Ltd. are exactly identical to the facts in the case of the assessee. In that case, the assessee was allotted certain plots of land in Bandra Kurla Complex on lease subject to payment of lease premium to MMRDA. In addition, the assessee made further payment of premium to MMRDA towards additional basement area and areas towards lifts, staircase and lift lobbies, etc. during the year under consideration. Demand u/s.201(1) / 201(1A) was raised holding that the assessee was liable to deduct TDS as per the provisions of section 1941. The CIT(A) examined the issue in detail in that case and noted that the lease premium charged by the MMRDA to the assessees was equal to the prevailin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of agricultural income given in the Income Tax Act. It was held that such 10 ITA 686 687/M/12 CO 08 09/M/13 ITA 688 to 691/M/12 CO 12 to 15/M/13 payment has all the characteristics of a capital payment and it is not revenue in nature. The ld.CIT(A) further relied on the decision of Hon'ble Bombay High Court in the case of Commissioner of Income tax v. Khimline Pumps Ltd. (2002) 258 ITR 459 wherein it was held that amount of ₹ 45 lacs paid by the assessee to M/s. APVE Ltd. for acquisition of leasehold land was a capital expenditure. The ld.CIT(A) also referred to the decision of Special Bench of ITAT in the case of Mukund Ltd. 106 ITR 231 wherein it was held that the premium paid for acquiring leasehold right in land was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 14-08-2013 held as under: As the issue involved in the present cases as well as all the material facts relevant thereto are similar to the case of Wadhwa Associates Realtors Pvt.Ltd. (supra) decided by the Tribunal, we respectfully follow the said decision of the co-ordinate Bench of this Tribunal and uphold the impugned orders of the ld. GIT(A) holding that the lease premium paid by the assessees to MMRDA not being in the nature of rent as contemplated in section 194-I of the Act, they were not liable to deduct tax at source from the said payment and hence could not be treated as the assessees in default u1s.201(1) 201(14) of the Act. The appeals filed by the Revenue are accordingly dismissed. 5.3 Since the facts in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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