ITAT MUMBAI - Income Tax
Premium for acquiring lease hold rights – Rent as defined u/s 194-I of the Act - Requirement to deduct TDS – Held that:- The decision in ITO (TDS) v/s Wadhwa & Associates Realtors Pvt. Ltd., [ITAT MUMBAI] followed - the assessee has made payment in the financial year 2007-08 towards lease premium in respect of the plot of land - the premium is not paid under a lease but is paid as a price for obtaining the lease, hence it precedes the grant of lease - by any stretch of imagination, it cannot be equated with the rent which is paid periodically - A perusal of the records further show that the payment to MMRD is also for additional built up are and also for granting free of FSI area, such payment cannot be equated to rent.
The assessee has made payment to MMRD under Development Control for acquiring leasehold land and additional built up area - payment for acquiring leasehold land is a capital expenditure - definition of rent as provided under the provision, there is no reason to tamper or interfere with the findings of the CIT(A) - the payment on account of premium represents transfer price of the land on lease hold basis and no part thereof qualifies to fall within the meaning of "rent" as contemplated in section 194-I - no deduction of tax at source is required – thus, the payment made by the assessee to the CIDCO represent transfer price of the land on lease hold basis and it cannot be contemplated as rent within the meaning of section 194-I – thus, the order of the CIT(A) is upheld – Decided against Revenue.
The assessee has made payment to MMRD under Development Control for acquiring leasehold land and additional built up area - payment for acquiring leasehold land is a capital expenditure - definition of rent as provided under the provision, there is no reason to tamper or interfere with the findings of the CIT(A) - the payment on account of premium represents transfer price of the land on lease hold basis and no part thereof qualifies to fall within the meaning of "rent" as contemplated in section 194-I - no deduction of tax at source is required – thus, the payment made by the assessee to the CIDCO represent transfer price of the land on lease hold basis and it cannot be contemplated as rent within the meaning of section 194-I – thus, the order of the CIT(A) is upheld – Decided against Revenue.
Regards
Prarthana Jalan
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