TaxTMI 
TaxTMI 
2015 (11) TMI 1382
X X X X Extracts X X X X
X X X X Extracts X X X X
....t by whatever name called under any lease deed/agreement is to be taken as rent for TDS purpose. 3. The appellant craves leaves to add, alter or amend any or all the grounds of appeal." 3. Facts of the case, in brief, are that the assessee is the proprietor of Sea Face Beach Resort, Polly House, Shri Samarth Engineering Company businesses. During the course of TDS verification in the case of Pimpri Chinchwad New Town Development Authority (PCNTDA) on 07-11-2012 it was noted that the assessee had entered into lease agreement for 99 years with PCNTDA on the terms and conditionis laid down by the lessor in the lease deed dated 28-02-2011 for Plot No.1/1 in sector No.32A of the Pimpri Chinchwad New Town Development Authority, as per the terms of lease deed. The Assessing Officer reproduced clause 2 of the lease deed and came to the conclusion that provisions of section 194I of the I.T. Act are applicable in respect of payment of Rs. 6,07,13,928/- claimed to have been made in respect of premium for acquisition of Lease hold rights for 99 years as the same was nothing but rent. Accordingly, he raised demand u/s.201(1)/201(1A) of the I.T. Act after confronting the assessee on this i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Assessing Officer issued a show cause notice to the assessee and also issued summons to the deductor. In reply, the assessee explained that the transaction between it and PCNTDA was a transaction of sale and further appropriate tax return had been filed by it. The Assessing Officer was of the view that the transaction between the parties was not that of transfer, but of lease and there was no transfer of ownership of the property, but the same was leased for use either for commercial or residential purposes as approved by the Lessor. However, the Assessing Officer referred to the various restrictions on the Lessee / assessee put up by the Lessor and it was observed by the Assessing Officer that this was not a case of freehold transfer or sale and the assessee was not the absolute owner of the property. The Assessing Officer thus, concluded that the assessee was liable to deduct tax at source under section 194 I of the Act on the lease premium paid to PCNTDA. The assessee having failed to deduct tax at source, was held to be in default under section 201(1) of the Act at Rs. 13,73,696/- and further interest under section 201(1A) of the Act was charged at Rs. 82,416/-. Reliance was p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iety (supra), wherein it was held as under:- "6. We have heard the rival contentions and perused the record. The assessee was an educational society registered under section 12A of the Act. The assessee was running various schools and colleges in the city of Pune. During the year under consideration, in order to establish another school in Pimpri Chinchwad area, the assessee in reply to an advertisement by PCNTDA, applied for a plot on leasehold basis. As per the Bid document, where the Bid quoted by a party accepted, the said party was required to pay the quoted amount i.e. the premium within 3 months of the letter of allotment. In case such premium was not paid within period of 3 months, 25% of the Tender deposit was to be fortified and balance amount was to be refunded without any interest. The Tender document stated that the Tender was for the purpose of sale of reserved plots and as per the document full premium was to be paid to PCNTDA and lease agreement would be entered with the party. The assessee entered into a lease agreement with PCNTDA for 99 years and the lease rent was Rs. 100/- per annum for the period of 99 years. The assessee accordingly, deposited the pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 for assessment years 2006-07 to 2009-10, wherein the Tribunal in its order dated 12.08.2013, held that lease premium paid by the assessee to the City and Industrial Development Corporation of Maharashtra Ltd. (CIDCO) for acquiring development and leasehold rights for a period of 60 years, was not required to be subject to deduction at source under section 194I of the Act. Further another Bench of the Mumbai Tribunal in the case of M/s. Wadhwa Associates in ITA No.695/Mum/2012, vide order dated 03.07.2013, held that TDS was not required to be deducted under section 194I of the Act in respect of payment of lease premium to M/s. MMRD Ltd. 10. In view of above said facts and circumstances, wherein the lease premium was paid to PCNTDA by the assessee as a pre-condition for entering into a lease agreement, the same cannot be said to have been paid consequent to the lease agreement executed between the parties. Further, the CIT(A) has given a finding that stamp duty had been paid on the market value of the plot represented by the lease premium, which has not been controverted by the learned Departmental Representative for the Revenue. Relying upon the ratio laid down by the Mumbai Benc....