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TMI Blog2014 (7) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the Revenue and are directed against two separate orders dated 27/12/2012 passed by Ld. CIT(A)-14, Mumbai for assessment years 2009-10 and 2011-12. 2. In both these appeals Revenue has agitated the deletion of demand raised on account of TDS and interest amounting to ₹ 1,28,63,016/- and ₹ 6,05,599/- for assessment year 2009-10 and 2011-12 respectively levied under section 201(1) and 201(1A) of the Income Tax Act, 1961 (the Act). 3. It is the case of the Revenue that assessee did not comply with the provisions of section 194-I and has failed to deduct tax of ₹ 1,03,73,400/- in A.Y 2009-10 and ₹ 5,31,227/- for A.Y.2011-12. Similarly, interest of ₹ 24,89,616/- and ₹ 74,372/- is also levied under section 201(1A) on non-deduction of tax for A.Y. 2009-10 and 20011-12 respectively. 4. It is the case of the Revenue that tax was deductible under section 194-I on lease premium paid by the assessee in respect of plot of a land obtained by the assessee from CIDCO i.e. Plot No.20A, Block-B, situated at No.2, Dronagiri, Navi Mumbai. The Revenue has raised as many as 14 grounds to contest deletion made by Ld. CIT(A), who has deleted this deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 its failure to deduct the tax at source from the payment of lease premium made to CIDCO. The assessee filed its reply to show cause notice issued by the A.O. explaining its stand on the issue and after considering and discussing the same in detail, the A.O. held that the assessee was liable to deduct tax at source from the payment made to CIDCO on account of lease premium and treated the assessee in default for failure to do so for the following reasons given in the order passed u/s 201(1) and 201(1A) of the Act: At the outset, it needs to be mentioned that the Assessee s representative has vehemently claimed that the payment referred in show cause does not bear the character of Rent mentioned in Sect. 1941 and therefore there is no requirement of deduction of tax from such payment made to CIDCO. The land under question has been given by the Lessor to the assessee on Lease and for which it has paid the premium of ₹ 70,85,01,870/-. This lump-sum payment made by the Leasee i.e. M/s. Shah Group Builders Ltd. (assessee) has been made to avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g lease rent as lease premium, does not change its real character. The nomenclature used in respect of such lease premium payment is not decisive. Here it is necessary to mention that the Legislature has taken due care of such situations arising by usage of different terminology by providing a comprehensive 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 meaning of section 20 1(1) and thereby it is an assessee in default . Accordingly, assessee is treated as assessee in default and directed to make pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 695/Mum/2012. In the case of M/s Wadhwa Associates Realtors Pvt. Ltd. (supra), a similar issue was decided by the Tribunal in favour of the assessee for the following reasons given in para 9 to 10 of its order dated 3-7-2013 (supra):- 9. We have considered the rival submissions, perused the order of the lower authorities and the material evidence brought on record in the form of paper Book and the judicial decisions relied upon by the rival parties. The entire grievance revolves around the premium paid by the assessee to M/s. MMRDA Ltd. for the leasehold rights acquired by the assessee through the lease deed dt. 22nd November, 2004. It is the say of the Revenue that this lease premium was liable for deduction of tax at source failing which the assessee is to be treated as assessee in default. It is the say of the assessee that such lease premium is in the nature of capital expenditure and therefore there is no question of deduction of tax at source. Further, the said lease premium does not come within the purview of the definition of rent as provided u/s. 194-1 of the Act. 10. We have carefully perused the lease deed as exhibited from page-1 to 42 of the Paper Book. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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