2014 (10) TMI 902

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....peals) erred in deleting the demand raised of Rs. 22,90,585/- u/s. 201(1)/201(1A) of the Income Tax Act, 1961 in respect of lease premium payment paid to Pimpri Chinchwad New Township Development Authority (PCNTDA). 2. The learned Commissioner of Income Tax (Appeals) erred in considering the fact lease premium paid to PCNTDA as upfront payment as pre- condition for entering in to lease agreement. 3. The learned Commissioner of Income Tax(Appeals) erred in not appreciating the fact that the deed entered into by the deductor with PCNTDA was not a transfer deed but a lease deed and explanation to section 1941 clearly stipulates that any payment by whatever name called under any lease deed / agreement is to be taken as rent fo....

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....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 assesse....

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....urview of definition of rent as specified in section 194I of the Act. The CIT(A) further observed from the ratio laid down in the case of Fox Conn India Developer (P) Ltd. (supra) was distinguishable on the facts as in that case issue in question was upfront payment and not lease premium. Further, upfront payment was part of consideration for acquiring leasehold rights unlike the present case where payment of lease premium was pre-condition for entering into lease agreement and therefore the facts of the case were clearly distinguishable. Further reliance was placed on the series of decisions, under which such similar payment of lease premium was held to be not subject to deduction of tax at source under section 194I of the Act. 9. We fi....