TaxTMI 
TaxTMI 
2017 (5) TMI 112
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces of the case and in law, the Ld.CIT(A) has erred in holding that the amount paid by the Lessee (M/s. Enam Financial Consultants Pvt. Ltd.) to the Lessor (MMRDA) was not in the nature of rent, as defined in the Explanation (i) to section 194-I of the Act for the purpose of deduction of tax at source. (ii) On the facts and in the 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 194-I from the payment made by the assessee to MMRDA for additional FSI from MMRDA. (iii) On the facts and in the 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter u/s 201(1) and also charged interest u/s 201(1A) for failure to deduct TDS on such premium paid by the Assessee to MMRDA. The Ld. CIT (Appeals) following the order of the Mumbai Bench in the case of Wadhwa Associates Realtors (P) Ltd. [36 Taxman 526] held that the Assessee is not liable to deduct TDS u/s 194-I of the Act on the premium paid by Assessee to MMRDA for acquiring additional FSI. 4. The Ld. Counsel for the Assessee submits that the issue in appeal is decided in favour of the Assessee in Assessee's own case for the assessment year 2009-10 in ITA No.3639/Mum/2015 by order dated 22.2.2017 by the Coordinate Bench. It is submitted that the Coordinate Bench held that lease premium paid by the Assessee to MMRDA is not in the natu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d can construct above areas free of FSI, that means for the purpose of calculation of FSI the above areas shall be excluded. The assessee during the assessment year 2009-10, paid Rs. 4,23,81,332/- to MMRDA as premium for acquiring staircase, lifts, lift room, lobbies etc. for counting fee of FSI. This premium paid by the assessee was treated as rent under the provisions of section 194I by the Assessing Officer and since no tax was deducted by the Assessee on such premium paid to MMRDA, the Assessing Officer invoked the provisions of section 194I and treated the assessee treating the assessee as defaulter u/s 201(1) and 201(1A) of the Act. 6. The question before us to be decided is whether the premium paid by the assessee to MMRDA for acq....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessees was equal to the prevailing market rate for acquisition of commercial premises as per the valuation made for stamp duty purpose. He also noted that the rates so prescribed by the stamp duty authorities were for the acquisition of property and not for the use of let out property by the tenant. He further noted that even the additional premium was charged by the MMRDA to the assessee for the additional FSI as per the ready reckoner rate prescribed by the stamp duty authorities. The ld.CIT(A) held that the whole transaction involving grant of leasehold rights by the MMRDA to the assesses thus was nothing but the transaction of transfer of property and the lease premium agreed to be paid was the consideration for the acquisition of s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing leasehold right in land was a capital expenditure. The ld.CIT(A) then discussed the case laws relied upon by the AO in his orders and recorded a finding after such discussion that in none of the said case laws, it was held that the lease premium paid in the similar circumstances was in the nature of advance rent and tax was deductible at source u/s. 194-I of the Act. He held that the case laws relied upon by the AO, therefore, were distinguishable on facts and in law and the same were not applicable to the facts of the assessee' s case. The Id. CIT(A) finally referred to the decision of the Tribunal in the case of National Stock Exchange of India Limited (ITA No.1955/Mum/99 and others) and noted that in the similar facts and circums....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly dismissed." 5.3 Since the facts in the present case are absolutely identical to the facts in the case of Shree Naman Developers Ltd., respectfully following the decision of jurisdictional ITAT, with which I agree, it is hereby held that the lease premium paid by the assessee to MMRDA during the year under consideration, was not in the nature of rent as contemplated u/s. 1941 and, therefore, the assessee was not required to deduct tax at source from the said payment. Accordingly, the demand raised by the Assessing Officer, treating the assessee in default u/s.201(1) I 201(IA) is incorrect and is directed to be deleted. Grounds of appeal are allowed to the above extent. 7. As seen from the above, the ld. CIT (Appeals) held that....