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TMI Blog2014 (1) TMI 1497X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration u/s 194-1 of the Income Tax Act, 1961 (the Act). 3. The relevant facts of the case giving rise to this appeal are that the assessee was allotted certain plots of land in Kharghar, Navi Mumbai on lease subject to payment of lease premium to CIDCO. During the year under consideration, part payment of such lease premium was made by the assessee to CIDCO. According to the A.O., the assessee was required to deduct tax at source from the payment of lease premium made to CIDCO as per the provisions of section 194-1 of the Act and since no such tax was deducted by the assessee from the said payments, he issued notice to the assessee requiring it to show cause as to why it should not be treated as the assessee in default for it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that of Hon'ble Calcutta High Court in the ease of Braithwaite & Co. (1) Ltd. v/s CIT -- 111 ITR 542. Both the High Courts in these cases have ruled that lease premium paid in lump sum is nothing but the rent paid in advance to obviate periodical payments. Going by the verdict of these Hon'ble High Courts, the rulings are squarely applicable to the facts of the instant case. Therefore, the obligation was cast upon the Assessee to deduct tax at source from the lease premium paid to CIDCO as per the provisions u/s 194-I of the Income Tax Act, 1961. It is further necessary to mention that admittedly vide Lease Agreement referred to above the asessee has acquired right of occupancy and right of enjoyment of the impugned plot, and payment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sive definition of Rent in the section itself. In the light of the facts of the case, statutory provisions of Sect. 1941 especially definition of Rent provided in explanation thereto and the case laws cited above' the undersigned has no slightest hesitation in arriving at the conclusion that assessee was required to deduct tax u/s. 1941 and pay it to the Govt. Treasury within the stipulated time as required by provisions of chapter XVI1 B of the income Tax Act. Admittedly assessee has not complied with the provisions of section 1941 and thereby chapter XVII B of the income Tax Act by deducting the TDS from the Lease Rent paid to the C1DCO and not paid it to the Government Treasury. As a result Assessee has committed default within the mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of leased plot of land to CIDCO during the year under consideration was not in the nature of rent as contemplated u/s 194-I of the Act and the assessee was not required to deduct tax at source from the payment of premium made to CIDCO. The demand raised against the assessee by treating it as assessee in default vide an order passed by the A.O. u/s 201(1) & 201(1A) of the Act for the year under consideration, therefore, was cancelled by the ld. CIT(A). Aggrieved by the order of the ld. CIT(A), the Revenue has preferred this appeal before the Tribunal. 5. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that a similar issue involved in the case of Shree Naman Hotels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading of the said lease deed transpires that the premium is not paid under a lease but is paid as a price for obtaining the lease, hence it precedes the grant of lease. Therefore, by any stretch of imagination, it cannot be equated with the rent which is paid periodically. A perusal of the records further show that the payment to MMRD is also for additional built up are and also for granting free of FSI area, such payment cannot be equated to rent. It is also seen that the MMRD in exercise of power u/s. 43 r.w. Sec. 37(1) of the Maharashtra Town Planning Act 1966, MRTP Act and other powers enabling the same has approved the proposal to modify regulation 4A(ii) and thereby increased the FSI of the entire 'G' Block of BKC. The Development Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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