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TMI Blog2015 (11) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,112/- u/s 201(1)/201(1A) of the Income Tax Act,1961 in respect of lease premium payment paid to Pimpri Chinchwad New Township Development Authority (PCNTDA). 2. The learned Commissioner of Income Tax (Appeals) erred in considering the fact that the premium paid to PCNTDA is upfront payment as pre-condition for entering in to lease agreement. 3. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that the deed entered into by the deductor with PCNTDA was not a transfer deed but a lease deed and explanation to section 194I clearly stipulates that any payment by whatever name called under any lease deed/agreement is to be taken as rent for TDS purpose. 4. The appellant craves leaves to add, alter or amend a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease premium to PCNTDA. The Assessing Officer issued a show cause notice to the assessee and also issued summons to the deductor. In reply, the assessee explained that the transaction between it and PCNTDA was a transaction of sale and further appropriate tax return had been filed by it. The Assessing Officer was of the view that the transaction between the parties was not that of transfer, but of lease and there was no transfer of ownership of the property, but the same was leased for use either for commercial or residential purposes as approved by the Lessor. However, the Assessing Officer referred to the various restrictions on the Lessee / assessee put up by the Lessor and it was observed by the Assessing Officer that this was not a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of rent as provided under section 194 I of the Act. It was further pointed out by the CIT(A) that there is no merit in the reliance placed upon the decision of Chennai Bench of the Tribunal in Foxconn India Developer (P) Ltd. Vs. ITO (TDS) (supra) as the same was distinguishable on facts. In the facts of the case before the Tribunal, the issue in question was upfront payment of lease and further the said upfront payment was part of the conditions for acquiring leasehold rights, unlike the present case where, the payment of lease premium was a pre-condition for entering into a lease agreement. The CIT(A) placed reliance on the decision of Mumbai Bench of the Tribunal in Navi Mumbai SEZ(P) Ltd in ITA No.738 to 7741/Mum/2012, relating to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of reserved plots and as per the document full premium was to be paid to PCNTDA and lease agreement would be entered with the party. The assessee entered into a lease agreement with PCNTDA for 99 years and the lease rent was Rs. 100/- per annum for the period of 99 years. The assessee accordingly, deposited the premium amount of Rs. 2,20,24,860/-. After receiving the premium amount, the licenser i.e. PCNTDA agreed to execute Lease Deed to convey / transfer / assign the leasehold rights. The Lease Deed authorizes the assessee to build / construct any building on the said plot of land. The case of the assessee was that the payment of premium was a pre-condition for obtaining the lease rights and it was only after payment of the lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease agreement and therefore the facts of the case were clearly distinguishable. Further reliance was placed on the series of decisions, under which such similar payment of lease premium was held to be not subject to deduction of tax at source under section 194I of the Act. 9. We find that similar issue of payment of lease premium arose before the Mumbai Bench of the Tribunal in the case of Navi Mumbai SEZ (P) Ltd. in ITA Nos.738 to 740/Mum/2012 for assessment years 2006-07 to 2009-10, wherein the Tribunal in its order dated 12.08.2013, held that lease premium paid by the assessee to the City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO) for acquiring development and leasehold rights for a period of 60 years, was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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