2017 (4) TMI 707

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....d in holding that the amount paid by the Lessee A. Surti Developers Pvt. Ltd.) to the Lessor (MMRDA) was not in the nature of rent, as defined in the Explanation (i) to section 1941 of the Act for the purpose of deduction of tax at source. (ii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the claim of the assessee that no tax was deductible under section 194I from the payment made by the assessee to MMRDA for acquisition of the plot of land on lease from MMRDA. (iii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not confirming the order of the Assessing Officer treating the assessee as an assessee in default u/s 201(1) in respect of the amount of tax ....

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....urchase of free FSI viz. premium for area covered by staircase, lift, lobbies and balcony enclosure fee, which is in the nature of capital payment and not rent or lease payment. The AO was not convinced with the said reply of ASDL as in the remarks column of cheque payment voucher, it was mentioned as 'being pay order drawn in favour of MMRDA towards lease premium for City Survey No. 228'. The AO then held that lease premium of Rs. 60,55,050/- was paid by ASDL for continuous use of land under lease agreement and thus was covered under the definition of 'rent'. The AO thus held ASDL liable for non deduction of tax at source u/s 194I of the Act. Finally, the AO raised liability of Rs. 12,47,370/- u/s 201(1) and interest of Rs. 4,49,042/- u/s ....

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....) Jt.CIT, Spl.Rg. 25, Mumbai vs. Mukund Ltd. 106 ITD 231 (Mumbai ITAT - Special Bench), held that the impugned payment on account of lease premium did not fall within the purview of section 194I. Therefore, the learned CIT(A) allowed the appeal filed by the assessee before him. 5. Before us, the learned DR supports the order passed by the AO u/s 201(1) & 201(1A) of the Act. 6. We have heard the learned DR and perused the relevant material on record. The issue in the present appeal is whether the lease premium paid for a long term lease of 60 years can be termed as 'rent' within the meaning of section 194I of the Act. We find that the issue is squarely covered by the decision of the Co-ordinate Bench as mentioned at para 4 here-in-abov....