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TMI Blog2015 (11) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... t Authority (PCNTDA). 2. The Ld.CIT (Appeals) erred in considering the fact that the premium paid to PCNTDA is upfront payment as pre-condition for entering into lease agreement. 3. The Ld.CIT (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 1941 clearly stipulates that any payment by whatever name called under any lease deed/agreement is to be taken as rent for TDS purpose. 3. The appellant craves leaves to add, alter or amend any or all the grounds of appeal." 3. Facts of the case, in brief, are that the assessee is the proprietor of Sea Face Beach Resort, Polly House, Shri Samarth Engineering Company businesses. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (CIDCO) for acquiring development and leasehold rights for a period of 60 years was not required to be subject to deduction of tax at source u/s.194I of the I.T. Act, the CIT(A) held that the AO was not justified in raising the demand u/s.201(1)/201(1A). 5. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 6. After hearing both the sides, we find an identical issue had come up before the Tribunal in the case of ITO Vs. Preetam Medical Foundation & Research Centre vide ITA No.190/PN/2014 order dated 16-01-2015 wherein similar demand u/s.201(1) & 201(1A) was raised by the AO in respect of lease premium paid to PCNTDA. The CIT(A) deleted such demand and on appeal filed by the Revenue, the Tribunal dismissed the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses 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 case of freehold transfer or sale and the assessee was not the absolute owner of the property. The Assessing Officer thus, concluded that the assessee was liable to deduct tax at source under section 194 I of the Act on the lease premium paid to PCNTDA. The assessee having failed to deduct tax at source, was held to be in default under section 201(1) of the Act at Rs. 13,73,696/- and further interest under section 201(1A) of the Act was charged at Rs. 82,416/-. Reliance was placed on the ratio laid down by Chennai Bench of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mium 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 assessment years 2006-07 to 2009-10, vide order dated 12.08.2013, in order to hold that the payment of lease premium to PCNTDA being a pre-condition for entering into lease agreement, could not be said to be paid under the terms of lease agreement. Further, stamp duty had been paid on the market value of the plot represented by lease premium. In view thereof, the Assessing Officer was directed to delete the demand created under sections 201(1) and 201(1A) of the Act. 7. The issue arising in the present appeal is squarely covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ild / 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 premium, the lease agreement was entered into and bundle of rights were obtained by the assessee. 7. The Assessing Officer held the assessee to be default in respect of the TDS payable on such lease rent payment to PCNTDA. Reliance was placed on the ratio laid down by the Chennai Bench of the Tribunal in Fox Conn India Developer (P) Ltd. (supra). The assessee was held to be in default for nondeduction of tax on source under section 194I of the Act on the lease premium paid to PCNTDA and demand under section 201(1) of the Act was raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13, 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 required to be subject to deduction at source under section 194I of the Act. Further another Bench of the Mumbai Tribunal in the case of M/s. Wadhwa Associates in ITA No.695/Mum/2012, vide order dated 03.07.2013, held that TDS was not required to be deducted under section 194I of the Act in respect of payment of lease premium to M/s. MMRD Ltd. 10. In view of above said facts and circumstances, wherein the lease premium was paid to PCNTDA by the assessee as a pre-condition for entering into a lease agreement, the same cannot be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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