TMI Blog2018 (3) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... o deduct any sum in accordance with the provisions of this Act and he does not deduct, or does not pay or after deduction fails to pay the whole or in part of the tax as required under the provisions of the Act, then only such person shall be deemed to be an assessee in default in respect of payment of such tax. In the case in hand, the assessee was not liable to deduct any tax on payment of lease premium to MMRDA because it was capital expenditure to acquire land on lease with substantial right to construct a commercial building complex - Decided in favour of assessee. - I.T.A. No. 707/Kol/2016 - - - Dated:- 23-3-2018 - Shri A. T. Varkey, JM And Shri Waseem Ahmed, AM For the Appellant : Shri Arindam Bhattacharjee, Addl. CIT Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate the applicability of the ratio of judicial pronouncement in the case of CIT vs. Panbari Tea Co. Ltd. [57 1TR 422 (SC)(1965)] on the issue. Ground No. 5 That on the facts circumstances of the case, the department craves to add, alter, modify the above grounds of appeal, during the course of appellate proceedings. 3. Facts in brief are that the assessee is a Joint Venture Company promoted by TCG Urban Infrastructure Holdings Ltd (51%), Hiranandani Properties Pvt. Ltd (24%) and Intelligent Parks Pvt. Ltd (25%). By virtue of a lease deed dated 23.06.2008 and by virtue of the Supplementary lease deed dated 01.02.2012 in between the assessee and the Mumbai Metropolitan Region Development Authority the assessee has taken o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04/01/2012 Ground rent Total : 7,560/- 8,88,12,947/- In this regard, the assessee was asked to explain why your failure to deduct TDS on the said payments to MMRDA under the agreements as mentioned, shall not be treated as default u/s. 201(1)/201(lA) of the Act. In response, the assessee filed written submission on 20.03.2013 and on consideration of the same the AO was of the view that the premium paid was in the nature of rent and consequently the assessee, should have deducted TDS u/s. 194I of the Act and TDS on interest paid u/s. 194A. On appeal, the Ld. CIT(A) following decision in the appellate order No. 776 dated 24.11.2015 for AY 2011-12 held that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh or by the issue of a cheque or draft or by any other mode, whichever is earlier, shall deduct income-tax thereon at the rate prescribed therein. Since in the present case, we have held that the lease premium paid by the assessee was capital in nature and was not rent, therefore, we are unable to approve the findings of TDS Officer/Assessing Officer that the assessee was liable to deduct TDS on payment of lease premium to MMRDA. At this point, we place reliance on the judgment of Hon'ble jurisdictional High Court of Delhi in the case of Krishak Bharati Cooperative Ltd. vs DCIT (2013) 350 ITR 24 (Del) wherein their lordships held that for premium on acquisition of lease hold rights in the land, lease for 90 years with substantial inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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