2014 (7) TMI 386

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....or the assessment year 2008-09. 2. The main issue involved in this appeal is that, whether the learned Commissioner (Appeals) has erred in law and on facts in holding that the amount paid by the assessee to CIDCO (City and Industrial Development Corporation), towards premium for acquiring lease hold rights is in the nature of rent or not as defined in section 194-I of the Act, and accordingly, the assessee was not required to deduct the tax at source under section 194-I. 3. Before us, the learned Counsel for the assessee submitted that this issue is covered by a series of decisions given by the Tribunal, Mumbai Bench, in various cases, wherein it has been consistently been held that the amount of premium in such cases to the Governmen....

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....tion of rent as stipulated under section 194-I of the Act. 6. The learned Commissioner (Appeals), after considering the detail submissions of the assessee and analyzing various decisions and also the lease deed between the assessee and CIDCO, came to the conclusion that such a payment cannot be treated as in the nature of rent within the meaning of section 194-I. The Tribunal in Shelton Infrastructures Pvt. Ltd. (supra), after noting series of decisions of the Tribunal, decided the issue in favour of the assessee and against the Revenue after observing and holding as under:- "6. We have heard the rival contentions and have perused the various decisions of the Tribunal relied upon by the assessee. We find that the Tribunal, Mumbai Benc....

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....rd in the form of paper Book and the judicial decisions relied upon by the rival parties. The entire grievance revolves around the premium paid by the assessee to M/s. MMRDA Ltd. for the leasehold rights acquired by the assessee through the lease deed dt. 22nd November, 2004. It is the say of the Revenue that this lease premium was liable for deduction of tax at source failing which the assessee is to be treated as assessee in default. It is the say of the assessee that such lease premium is in the nature of capital expenditure and therefore there is no question of deduction of tax at source. Further, the said lease premium does not come within the purview of the definition of rent as provided u/s. 194-I of the Act. 10. We have carefully....

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....pply on the facts of the case wherein the Hon'ble Jurisdictional High Court has held that payment for acquiring leasehold land is a capital expenditure. Considering the entire facts in totality in the light of the judicial decisions vis-à-vis provisions of Sec. 194-I, definition of rent as provided under the said provision, we do not find any reason to tamper or interfere with the findings of the Ld. CIT(A) which we confirm". 8. 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. & Shree Naman Developers Ltd. (supra) decided by the Tribunal, we respectfully follow the decisions ....