TaxTMI 
TaxTMI 
2010 (12) TMI 7
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....nt, respondent herein issued show cause notice to the appellant dated 4th December, 1995, inter alia, alleging that since the lease is for a period of nine years extendable for a further period of nine years, it was a lease for a period of more than 12 years and hence the provision of Chapter XXC of the Income-tax Act (hereinafter referred to as the "Act") would be attracted and the lessor and the lessee were obliged to submit Form 37-1 within 15 days of the draft agreement. Appellants submitted their show cause on 12th January, 1996, inter alia, contending that the lessee had an option to renew the lease by giving three months' notice prior to the expiry of the lease and further a fresh lease deed was required to be executed and registered....
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.... 1 and 12 of the lease deed, it becomes clear that lessor intended the lease to last for 18 years. The lessor could not have refused to renew/extend the lease after first term if the lessee complied with the conditions for renewal/extensions. So in view of explanation to Section 269UA(f)(i) of the Act, the total terms of the lease will be 18 years no matter whether it is for a single term of 18 years or two terms of nine years each or three terms of six years each or six terms of three years each. Whether the subsequent terms are described as extensions or renewals is immaterial for the purpose of Section 269UA(f)(i). If the aggregate of the original term and stiupulated extension/renewal comes to more than 12 years, such a lease will fall ....
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....period of nine years more and, therefore, in view of the explanation to Section 269UA(f) of the Act, the total period of lease comes to more than 12 years and hence the provisions of Chapter XXC of the Act was clearly attracted. The rival submissions necessitate examination of Section 269UA(f)(i) of the Act, particularly its explanation, same reads as follows: "269UA(f) "transfer", - (i) in relation to any immovable property referred to in sub-clause (i) of clause (d), means transfer of such property by way of sale or exchange or lease for a terms of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in section 53A of....
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....eed to lease out to the Lessee of the Second Part the demised premises as aforesaid which are being used for commercial purposes at present namely on the lower ground floor/basement, ground floor/upper ground floor, first floor, second floor and the terrace of the building known as B-68, Greater Kailash-I, New Delhi - 110048, and clearly delineated in green outlines in the site plan annexed herewith for a period of nine years, extendable purely at the discretion and option of the Lessee of the Second Part for a further period of nine years, commencing from the date when the possession of the peremises is handed over i.e. 1.06.1991 and ending on the last date when the period of first nine years expires i.e. on 31.05.2000 at a monthly lease a....
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....on 269UA(f) of the Act and in fact, we are proceeding on an assumption that it will cover only such cases where exists provision for extension in lease deed. In our opinion, what we are required to consider is the terms and conditions of lease. The terms of lease are not to be interpreted following strict rules of construction. One term of the lease cannot be taken into consideration in isolation. Entire document in totality has to be seen to decipher the terms and conditions of lease. Here in the present case, Clause 1 in no uncertain term provides for extension of period of lease for a further period of nine years and clause 12 thereof provides for renewal on fulfillment of certain terms and conditions. Therefore, when the document is con....