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TMI Blog2013 (9) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law as well as on facts in holding that the provisions of Sec. 194-I are not applicable on the facts of the case. 3. The impugned assessment order is dt. 29.3.2011 passed u/s. 201(1) and 201(1A) of the Act. The facts of the case show that the assessee has made payment of lease premium to M/s. MMRD Ltd. amounting to Rs. 949.92 crores approximately during the year under consideration. This lease premium was paid for allotment of a plot of land namely C-59 in 'G' Block of Bandra Kurla Complex, Bandra (E), Mumbai as per lease deed dt. 22.11.2004 and also for additional FSI in respect of the said plot. The AO was of the firm belief that the assessee was liable to deduct tax as per provisions of Sec. 194-I of the Act in respect of the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the facts and the submissions and the nature of transaction, the Ld. CIT(A) observed that the amount charged by MMRD as lease premium is equal to the rate prevalent as per Stamp Duty recovery for acquisition of the commercial premises. These rates are prescribed for transfer of property and not for the use as let out tenanted property. The Ld. CIT(A) further observed that even the additional FSI given for additional charges as per Ready Reckoner rates only. It is the finding of the Ld. CIT(A) that the whole transaction towards grant of leasehold transaction rights to the assessee is nothing but a transaction of transfer of property and the lease premium is the consideration for the purchase of the said leasehold rights. The ld. CIT(A) we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Jurisdictional High Court in the case of CIT Vs Khimline Pumps Ltd., 258 ITR 459 wherein the Hon'ble Jurisdictional High Court has held that an amount of Rs. 45 lakhs paid by the assessee to M/s. APVE Ltd., for acquisition of leasehold land was a capital expenditure and hence the same was not deductible. The Ld. CIT(A) has further considered the decision of the Special Bench of Mumbai Tribunal in the case of JCIT Vs Mukund Ltd. 106 ITD 231 wherein the issue was whether the premium paid for acquiring leasehold right in land is revenue or capital . The Special Bench has held that the same is capital expenditure. 5.2. The Ld. CIT(A) has distinguished the facts of the cases relied upon by the AO at page-53 para 5.39 of his order and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The Ld. CIT(A) finally concluded that the amount paid by the assessee is lease premium for acquiring leasehold rights and additional FSI in respect of the leased plot and the same is not in the nature of rent as contemplated u/s. 194-1 of the Act. Accordingly, the assessee was not required to deduct tax at source u/s. 194-1 of the Act and deleted the demand raised by the assessee. 6. Aggrieved by this finding of the Ld. CIT(A), Revenue is before us. 7. The Ld. Departmental Representative strongly supported the findings of the AO. 8. The Ld. Senior Ld. Counsel for the assessee reiterated what has been stated before the lower authorities. 9. We have considered the rival submissions, perused the order of the lower authorities and the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posal to modify regulation 4A(ii) and thereby increased the FSI of the entire 'G' Block of BKC. The Development Control Regulations for BKC specify the permissible FSI. Pursuant to such provisions, the assessee became entitled for additional FSI and has further acquired/purchased the additional built up area for construction of additional area on the aforesaid plot. Thus the assessee has made payment to MMRD under Development Control for acquiring leasehold land and additional built up area. The decisions of the Tribunal in the case of M/s. National Stock Exchange (supra) and Mukund Ltd (supra) have been well discussed by the Ld. CIT(A) is his order. The decision of the Hon'ble Jurisdictional High Court in the case of Khimline Pumps Ltd. (s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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