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TMI Blog2017 (1) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount paid by the Lessee (M/s. Atul Agarwal & Sons) to the Lessor (CIDCO) was not in the nature of rent, as defined in the Explanation (i) to section 194I of the Act for the purpose of deduction of tax at source. (ii) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in accepting the claim of the assessee that no tax was deductible under section 194I from the payment made by the assessee to CIDCO for acquisition of the plot of land on lease from CIDCO. (iii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not confirming the order of the Assessing Officer treating the assessee, as an assessee in default u/s. 201 (1) in respect of the amount of tax which has not been deducted under section 194I from the payment made to CIDCO and levying interest under section 201(1A). (iv) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in ignoring the definition of rent, as contained in section 194I and in resorting to interpretative reasoning whereas as per the settled principle of jurisprudence, this exercise is required only when the law is unclear. (v) On the facts and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atka High Court in the case of CIT v. HMT Limited (1993) 203 ITR 820(Kar.) . It was observed by the AO that the TDS liability arises the moment the party's account is credited or payment is made whichever is earlier. Thus, the A.O. treated the assessee as assessee in default in terms of section 201(1) and 201(1A) of the Act for non-deduction of tax at source and for non-payment of interest thereon. The A.O. accordingly worked out total liability of tax and interest as under, vide orders dated 18.03.2013 passed by the AO u/s 201 and 201(1A) of the Act:- Lease premium paid by the assessee Rs. 11,43,36,405/- Tax @ 10.3% on the above Rs. 1,17,76,650/- Interest u/s 201(1A) @ 1% for the period 01.4.2010 to 31.03.2013 (36 months) Rs. 42,39,594/- Total liability of tax and interest payable by the assessee Rs. 1,60,16,244/- 4 Aggrieved by the orders dated 18.03.2013 passed by the A.O. u/s 201(1) and 201(1A) of the Act, the assessee preferred an appeal before the ld. CIT(A). 5. Before the ld. CIT(A), the assessee submitted that the payment of Rs. 11,43,36,405/- was made towards acquisition of plot/land for the purpose of development for commercial and residential complex fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "6. As the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Wadhwa & Associates Realtors Pvt. Ltd. (supra) as well as Shree Naman Hotels Pvt. Ltd. (supra) decided by the Tribunal, we respectfully follow the decisions rendered in the said cases by the co-ordinate Bench of this Tribunal and uphold the impugned order of the Ld. CIT(A) holding that the lessee premium paid by the assessee to CIDCO not being in the nature of rent as contemplated in section 194-I of the Act, the assessee was not liable to deduct tax at source from the said payment and hence could not be treated as the assessee in default u/s. 201(1)/201 (1A) of the Act. The appeal filed by the Revenue is accordingly dismissed." Following the above decision of the Tribunal, the ld. CIT(A) deleted the addition made by the A.O. on account of default u/s 201(1)/201(1A) of the Act and allowed the appeal of the assessee, vide appellate orders dated 25-06- 2014. 6. Aggrieved by the appellate orders dated 25-06-2014 of the ld. CIT(A), the Revenue is in appeal before the Tribunal. 7. The ld. D.R. submitted that the additions have been made for default by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or arrangement for the use of any land or building or machinery or plant or equipment or furniture or fittings. 2. The issue of whether or not TDS under section 194-I of the Act is applicable on 'lump sum lease premium' or 'one-time upfront lease charges" paid by an assessee for acquiring long-term leasehold rights for land or any other property has been examined by CBDT in view of representations received in this regard. 3. The Board has taken note of the fact that in the case of The Indian Newspaper Society (ITA Nos. 918 & 920/2015), the Hon'ble Delhi High Court has ruled that lease premium paid by the assessee for acquiring a plot of land on an 80 years lease was in the nature of capital expense not falling within the ambit of section 194-1 of the Act. In this case, the court reasoned that since all the rights easements and appurtenances in respect of the said land were in effect transferred to the lessee for 80 years and since there was no provision in lease agreement for adjustment of premium amount paid against annual rent payable, the payment of lease premium was a capital expense not requiring deduction of tax at source under section 194-I of the Act. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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