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TMI Blog2018 (8) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire account has been credited to the head ‘Lease Rent Received Account’. Once that is so, then in view of the proviso to Section 201 which came into effect from 01.07.2012, then assessee cannot be held as ‘assessee-in-default’. In view of the CBDT Circular and also the fact that the deductee has shown the amount paid as income and also paid taxes thereon, therefore, the assessee cannot be treated as ‘assessee-indefault’ and consequently, no interest u/s.201(1A) can be charged. Accordingly, Revenue’s appeal is dismissed. - Decided against the revenue. - I.T.A. No. 5795/DEL/2015, I.T.A. No.6540/DEL/2015 - - - Dated:- 13-8-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER And SHRI O. P. KANT, ACCOUNTANT MEMBER Appellant by : Shri Ashwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted TDS u/s.194-I @ 10%; and accordingly, held that the amount of ₹ 29,20,298/- was TDS payable u/s 194I and treated assessee as assessee in default in terms of Section 201(1) and also levied interest of ₹ 9,51,928/-. 4. Before the ld. CIT(A), the assessee submitted that only 1% of the cost of purchased land from UPSIDC at the most can be treated as lease rent and be treated as part of rent, hence TDS default should be restricted to ₹ 2,98,258/- which is 10% of the lease rent paid of ₹ 29,28,580/-. One important fact which was pointed out that, UPSIDC has submitted its account and also confirmed that the amount paid by the assessee has been credited in the statement of P L account and income tax has been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 111935572 Lease Rent - 29202985 Interest on principal amount - 247990608 Payment to farmers - 45185242 Total - 2451172257 TRANSFER TO SALE Land Cost - 57610344 Construction and other overhead - 249655150 Closing stock 93126775 37954832 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non refundable upfront charges paid by the assessee for acquisition of leasehold rights over an immovable property cannot be constituted as rental income and assessee is not obliged to deduct tax at source u/s.194I. Thus, on this ground alone assessee cannot be treated as assessee-in-default u/s. 201(1). Apart from that, he submitted that on merits also now there are catena of decisions that, if lease premium paid by the assessee to the authorities for acquiring a leasehold land for a very long term, then it does not fall within the meaning of rent u/s.194-I. In support, he relied upon the following judgments. 1. ITO (TDS), Mumbai vs. Navi Mumbai SEZ (P.) Ltd., (2014) 147 ITD 261 (Mum-Trib.) 2. Trill Infopark Ltd. vs. ITO (TDS) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed 9. This proviso has been held to have retrospective effect by the Hon'ble Delhi High Court in the case of Ansal Land Mark Township Pvt. Ltd. (supra) and by the Hon'ble Supreme Court in the case of CIT vs. Calcutta Export Co. (supra), wherein it has been held that the proviso brought u/s. 40(a)(ia) and 201, has to be given retrospective effect. Moreover, now the CBDT has issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g deduction of tax at source under section 194-1 of the Act. 4. Further, in the case Foxconn India Developer Limited (Tax Case Appeal No. 801/2013), the Hon ble Chennai High Court held that the one-time non-refundable upfront charges paid by the assessee for the acquisition of leasehold rights over an immovable property for 99 years could not be taken to constitute rental income in the hands of the lessor, obliging the lessee to deduct tax at source under section 194-1 of the Act and that in such a situation the lease assumes the character of deemed sale . The Hon ble Chennai High Court has also in the cases of Tril Infopark Limited (Tax Case Appeal No. 882/2015) ruled that TDS was not deductible on payments of lump sum lease premium ..... X X X X Extracts X X X X X X X X Extracts X X X X
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