Lease premium for leasehold rights and FSI benefits is not rent under section 194-I, so no TDS applies.

Lease premium paid to acquire leasehold rights and additional FSI was treated as consideration for obtaining property rights, not as a periodic payment for use of land. The payment was characterised as capital expenditure rather than "rent" within section 194-I, so tax deduction at source was not required on that amount.

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Issues: Whether the lease premium paid for acquisition of leasehold rights and additional FSI was "rent" within the meaning of section 194-I of the Income-tax Act, 1961, so as to require deduction of tax at source.

Analysis: The payment was found to be a price paid for obtaining the lease and for acquiring leasehold rights, not a periodic payment made under an existing lease. It was also linked with acquisition of additional built-up area and FSI benefits, which were treated as consideration for transfer of property rights rather than consideration for use of land as rent. On the facts, the payment was held to be in the nature of capital expenditure and outside the scope of "rent" under section 194-I.

Conclusion: The assessee was not liable to deduct tax at source under section 194-I on the lease premium payment.

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