TMI Blog2017 (2) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under provisions of 194I of the Act - appeal dismissed - decided against Revenue. - ITA NO. 3639/MUM/2015 - - - Dated:- 22-2-2017 - SHRI CN PRASAD, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER Appellant by : Mrs Beena Santosh Respondent by : Shri Manish D Desai O R D E R PER C.N.PRASAD (J.M.) : This appeal is filed by the revenue against the order of the Ld. CIT (Appeals)-40, Mumbai dated 26.03.2015 for the assessment year 2009-10. 2. The revenue is challenging the order of the ld. CIT (Appeals) in holding that the amount paid by the Assessee to the lessor, i.e. M/s Mumbai Metropolitan Regional Development Authority (MMRDA) was not in the nature of rent as defined in Explanation (i) to sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumes 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 FSI, that means for the purpose of calculation of FSI the above areas shall be excluded. The assessee during the assessment year 2009-10, paid ₹ 4,23,81,332/- to MMRDA as premium for acquiring staircase, lifts, lift room, lobbies etc. for counting fee of FSI. This premium paid by the assessee was treated as rent under the provisions of section 194I by the Assessing Officer and since no tax was deducted by the Assessee on such premium paid to MMRDA, the Assessing Officer invoked the provisions of section 194I and treated the assessee treating the assessee as defaulter u/s 201(1) and 201(1A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 prevailing market rate for acquisition of commercial premises as per the valuation made for stamp duty purpose. He also noted that the rates so prescribed by the stamp duty authorities were for the acquisition of property and not for the use of let out property by the tenant. He further noted that even the additional premium was charged by the MMRDA to the assessee for the additional FSI as per the ready reckoner rate prescribed by the stamp duty authorities. The ld.CIT(A) held that the whole transaction involving grant of leasehold rights by the MMRDA to the assesses thus was nothing but the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 capital expenditure. The ld.CIT(A) then discussed the case laws relied upon by the AO in his orders and recorded a finding after such discussion that in none of the said case laws, it was held that the lease premium paid in the similar circumstances was in the nature of advance rent and tax was deductible at source u/s. 194-I of the Act. He held that the case laws relied upon by the AO, therefore, were distinguishable on facts and in law and the same were not applicable to the facts of the assessee' s case. The Id. CIT(A) finally referred to the decision of the Tribunal in the case of Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 present case are absolutely identical to the facts in the case of Shree Naman Developers Ltd., respectfully following the decision of jurisdictional ITAT, with which I agree, it is hereby held that the lease premium paid by the assessee to MMRDA during the year under consideration, was not in the nature of rent as contemplated u/s. 1941 and, therefore, the assessee was not required to deduct tax at source from the said payment. Accordingly, the demand raised by the Assessing Officer, treating the assessee in default u/s.201(1) I 201(IA) is incorrect and is directed to be deleted. Grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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