TRENT LTD, MUMBAI V. ASST CIT (TDS) 3(2), MUMBAI

CO 161/MUM/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8954 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 19-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T ROUMUAN PAITE E
• Assessee Lawyers: MAHESH O RAJORA E F
• Keywords: Capital asset; Maximum Marginal Rate; Capital receipt; Capital expenditure
• Section: 37(1); 201(1); 37

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI .. , !'# $ $ $ $ %&. !.'.. $(, ) !'# !* BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM !./ I.T.A. NO. 4629 /MUM/2012 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2011-12) INCOME TAX OFFICER (OSD)(TDS) 3(2), 10 TH FLOOR, SMT K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400 002. ( ( ( ( / VS. M/S TRENT LIMITED, BOMBAY HOUSE, 24 HOMI MODY STREET, FORT, MUMBAI 400 001. #. !./ PAN : AAACL 1838J ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) 01* !/C.O. NO. 161 /MUM/20 13 ARISING OUT OF ITA NO. 4629 /MUM/20 12 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2011-12) M/S TRENT LIMITED, BOMBAY HOUSE, 24 HOMI MODY STREET, FORT, MUMBAI 400 001. ( ( ( ( / VS. INCOME TAX OFFICER (OSD)(TDS) 3(2), 10 TH FLOOR, SMT K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400 002. #. !./ PAN : AAACL 1838J CROSS OBJECTOR .. ( 01./ / RESPONDENT ) ITA 4629/M/12 CO NO. 161/M/13 2 ./ E F ! / ASSESSEE BY : SHRI MAHESH O. RAJORA 01./ E F ! / DEPARTMENT BY : SHRI T. ROUMUAN PAITE !($ E / // / DATE OF HEARING : 13-08-2013 GH- E / DATE OF PRONOUNCEMENT : 21-08-2013 'I / O R D E R PER P.M. JAGTAP, A.M. : .. , !'# THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - 14, MUMBAI DATED 27-04-2012 FOR ASSESSMENT YEAR 201 1-12 AND THE SAME IS BEING DISPOSED OF ALONG WITH THE CROSS OBJECTION FI LED BY THE ASSESSEE. 2. ALTHOUGH THE REVENUE HAS RAISED AS MANY AS 12 GR OUNDS IN THIS APPEAL, THE SOLITARY ISSUE ARISING OUT OF THE SAME IS WHETHER THE ASSESSEE IS REQUIRED TO DEDUCT TAX AT SOURCE FROM THE PAYMENT O F LEASE PREMIUM MADE TO MMRDA DURING THE YEARS UNDER CONSIDERATION U/S 194- I OF THE INCOME TAX ACT, 1961 (THE ACT). 3. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH IS APPEAL ARE THAT M/S SATNAM REALTORS PVT. LTD. WAS ALLOTTED A PLOT OF LA ND IN BADRA-KURLA COMPLEX IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06 ON LE ASE SUBJECT TO PAYMENT OF LEASE PREMIUM TO MMRDA. THE SAID PARTY WAS ALSO ALL OTTED ADDITIONAL BUILT UP AREA IN RESPECT OF THE SAID PLOT OF LAND ALLOTTE D TO IT BY MMRDA SUBJECT TO FURTHER PAYMENT OF PREMIUM. M/S SATNAM REALTORS PV T. LTD. SUBSEQUENTLY MERGED WITH THE ASSESSEE COMPANY W.E.F. 1-4-2009 AN D CONSEQUENTLY PAYMENT ON ACCOUNT OF LEASE PREMIUM IN RESPECT OF P LOT OF LAND ALLOTTED ORIGINALLY TO M/S SATNAM REALTORS PVT. LTD. WAS MAD E BY THE ASSESSEE TO MMRDA. ACCORDING TO THE A.O., THE ASSESSEE WAS REQ UIRED TO DEDUCT TAX AT SOURCE FROM THE PAYMENT OF LEASE PREMIUM MADE TO MM RDA AS PER THE PROVISIONS OF SECTION 194-I OF THE ACT AND SINCE NO SUCH TAX WAS DEDUCTED BY ITA 4629/M/12 CO NO. 161/M/13 3 THE ASSESSEE FROM THE SAID PAYMENTS, HE ISSUED NOTI CE TO THE ASSESSEE REQUIRING IT TO SHOW CAUSE AS TO WHY IT SHOULD NOT BE TREATED AS THE ASSESSEE IN DEFAULT FOR ITS FAILURE TO DEDUCT THE TAX AT SOU RCE FROM THE PAYMENT OF LEASE PREMIUM MADE TO MMRDA. THE ASSESSEE FILED ITS REPL Y TO SHOW CAUSE NOTICE ISSUED BY THE A.O. MAKING ELABORATE SUBMISSIONS IN SUPPORT OF ITS CASE ON THE ISSUE WHICH AS SUMMARIZED BY THE A.O. IN HIS ORDERS PASSED U/S 201(1) AND 201(1A) OF THE ACT WERE AS UNDER: (I) THAT NO TAX HAS BEEN DEDUCTED AT SOURCE ON THE LEASE PREMIUM UPFRONT BY IT TO MMRDA/ CIDCO AS IT WAS CONSIDERED A PAYMEN T FOR ACQUISITION OF LAND DEVELOPMENT RIGHTS AND NOT MERELY A PAYMENT OF RENT FOR THE USE OF LAND (EMPHASIS SUPPLIED). IT IS FURTHER SUBMITTED BY THE APPELLANTS THAT THE PREDOMINANT OBJECTIVE FOR PAYMENT OF LEASE PREMIUM UNDER THE LEASE DEED IS ACQUISITION OF LEASEHOLD RIGHTS IN THE SAID LEASEHO LD PLOTS AND NOT MERELY FOR THE USE AND EXPLOITATION OF THE PLOT. B) IT IS SUBMITTED BY THE APPELLANTS THAT GRANT OF THE LEASE BY MMRDA IN FAVOUR OF THE ASSESSEE IS A CAPITAL ASSET AND HENCE THE CONSIDERATION RECEIVED BY MMRDA/CIDCO IS A CAPITAL RECEIPT AND NOT INCOME BY WAY OF RENT. C) IT IS FURTHER SUBMITTED BY THE APPELLANTS THAT E XCLUSIONS FROM DEDUCTION OF TAX AT SOURCE PROVIDED UNDER SECTION 196 OF THE INC OME-TAX ACT, 1961 IS APPLICABLE TO MMRDA/CIDCO AND IN TURN THE ASSESSEE. D) IT IS SUBMITTED BY THE APPELLANTS THAT LEASE PRE MIUM PAID TO MMRDA/CIDCO IS CONSIDERATION FOR TRANSFER OF IMMOVA BLE PROPERTY WHICH IS TAXABLE U/S. .45 OF THE ACT AS CAPITAL GAINS ON SAL E OF CAPITAL ASSET AND THEREFORE, IN THE HANDS OF PURCHASER, CONSIDERATION PAID BY WAY OF LEASE PREMIUM IS FOR ACQUISITION OF A CAPITAL ASSET. THE APPELLANTS HAVE RELIED UPON A NUMBER OF CASE LAWS IN SUPPORT OF ITS CONTENTIONS . 4. THE A.O. DID NOT FIND MERIT IN THE SUBMISSIONS M ADE BY THE ASSESSEE AND REJECTING THE SAME HE HELD THAT THE ASSESSEE WA S LIABLE TO DEDUCT TAX AT SOURCE FROM THE PAYMENT MADE TO MMRDA ON ACCOUNT OF LEASE PREMIUM FOR THE FOLLOWING REASONS GIVEN IN HIS ORDER PASSED U/S 201(1)/201(1A) OF THE ACT:- ITA 4629/M/12 CO NO. 161/M/13 4 I) PAYMENT ON ACCOUNT OF LEASE PREMIUM IS DEFINITE LY RENT WITHIN THE MEANING OF SECTION 1941 BECAUSE RENT MEANS ANY PAYM ENT BY WHATEVER NAME CALLED UNDER ANY LEASE ETC. FOR THE USE OF ANY LAND ETC. (II) SINCE THE PAYMENT ON ACCOUNT OF LEASE PREMIUM IS INCLUDED IN DEFINITION OF RENT AS DEFINED IN EXPLANATION (I) TO SECTION 1941, THERE IS NO NEED TO REFER TO ANY DECISION OR CASE LAW BECAUS E AS PER DECISION OF SUPREME COURT RULES OF INTERPRETATION / CONSTRUCTIO N COME INTO PLAY ONLY WHERE THERE IS AMBIGUITY IN LAW AND SUCH RULES OF INTERPRETATION / CONSTRUCTION HAVE NO PLACE WHEN THE LAW IS CLEAR AN D UNAMBIGUOUS. (III) MMRDA IS NEITHER GOVERNMENT NOR A CORPORATION INCORPORATED UNDER A CENTRAL ACT. ACCORDINGLY, IT DOES NOT QUALI FY FOR EXCLUSION FROM THE TDS OF CHAPTER XVII-B AS PROVIDED FOR UNDER SEC TION 196 OF THE ACT. (IV) ON GIVEN FACTS, IT IS CLEAR THAT THE ASSESSEE WAS LIABLE TO DEDUCT T.D.S. ON ANY PAYMENT BY WHATEVER NAME CALLED MADE BY IT TO MMRDA UNDER THE LEASE FOR THE USE OF LAND. SINCE, IT HAS NOT BEEN DONE, THE T.D.S. DEFAULT HAS OCCURRED. (V) ON FACTS AND CIRCUMSTANCES IT IS CLEAR THAT ALL PAYMENTS MADE BY THE ASSESSEE TO THE MMRDA ARE FOR USING THE LAND AND RI GHTS RELATED TO USE OF LAND. THERE IS NO RIGHT TO LAND. THIS IS CONCLUS IVELY PROVED BY RESTRICTIVE CLAUSES PUTTING ENCUMBRANCE ON THE ASSE SSEE. 5. AGAINST THE ORDER PASSED BY THE A.O. U/S 201(1)/ 201(1A) OF THE ACT, THE ASSESSEE FILED ITS APPEAL BEFORE THE LD. CIT(A) AND ELABORATE SUBMISSIONS WERE MADE ON ITS BEHALF BEFORE THE LD. CIT(A) IN SUPPORT OF THE STAND THAT THE LEASE PREMIUM PAID TO MMRDA NOT BEING IN THE NATURE OF AD VANCE RENT WITHIN THE MEANING OF SECTION 194-1 OF THE ACT, THE ASSESSEE W AS NOT LIABLE TO DEDUCT TAX AT SOURCE AND THEREFORE IT COULD NOT BE TREATED AS ASSESSEE IN DEFAULT U/S 201(1) & 201(1A) OF THE ACT. THE SAID SUBMISSIONS A S SUMMARIZED BY THE LD. CIT(A) IN HIS IMPUGNED ORDER WERE AS UNDER:- I) THE PAYMENT MADE BY THE APPELLANT (LESSEE) TO T HE MMRDA LESSER IS FOR ACQUIRING THE RIGHT IN THE LEASE PREM ISES AND NOT AN ADVANCE RENT FOR USE OF THE LEASE PREMISES OVER A P ERIOD OF 80 YEARS. II) THE PREMIUM HAS BEEN PAID FOR ALLOTMENT OF ADDI TIONAL BUILT UP AREA AND NOT AS A RENT FOR THE USE OF LAND. III) THE APPELLANT (LESSEE) HAS A RIGHT TO OWN AND TRANSFER THE LEASE PROPERTY FOR A CONSIDERATION SUBJECT TO COMPLIANCE OF CONDITIONS STIPULATED IN THE LEASE AGREEMENT. CLAUSE 3 (P) OF THE LEASE AGREEMENT ITA 4629/M/12 CO NO. 161/M/13 5 CLEARLY RECOGNIZES THE RIGHT TO OWNERSHIP OF THE LE SSEE OVER LEASE PROPERTY. IV) THE LEASE PROPERTY UNDER THE AGREEMENT CAN BE I NHERITED OR SUCCEEDED BY THE LEGAL HEIR OR SUCCESSOR. V) THE CLAUSES IN THE LEASE AGREEMENT REFERS TO THE PAYMENT MADE BY THE APPELLANT (LESSEE) AS A PREMIUM BEING CONSID ERATION FOR ACQUIRING THE LEASE HOLD PROPERTY. NONE OF THE CLAU SES IN THE LEASE AGREEMENT REFERS TO THE PREMIUM PAID BY THE APPELLA NT(LESSEE) AS ADVANCE RENT. VI) THE APPELLANT (LESSEE) WILL HAVE NO RIGHT TO GE T ANY REFUND OF PREMIUM PAID FOR ACQUIRING THE LEASE HOLD RIGHT ON ITS SURRENDER BEFORE THE EXPIRY DATE. VII) THE VARIOUS CLAUSES OF THE LEASE AGREEMENT WHI CH ARE REFERRED BY THE AO IN ITS SUBMISSION BEFORE YOUR HONOUR AS REST RICTIVE CLAUSES, ARE IN FACT REGULATORY CLAUSES INCORPORATED IN THE LEAS E AGREEMENT FOR DESIRED DEVELOPMENT OF THE LEASED AREA IN A PARTICU LAR MANNER AND A PARTICULAR PURPOSE AS REGULATORY AUTHORITY(MMRDA) P ROVIDE COMPLETE INFRASTRUCTURE AND GIVE EFFECT TO THE INTENTION OF THE GOVERNMENT TO DEVELOP THE AREA. VIII) KARNATAKA HIGH COURT JUDGEMENT IN THE CASE OF HMT LTD. HAS BEEN DECIDED BY THE HONBLE COURT ON A FINDING OF F ACT BY THE ITAT THAT THE PAYMENT MADE BY THE LESSEE CONSTITUTES AN ADVAN CE RENT AND HENCE THE SAME SHALL BE ALLOWED AS DEDUCTION U/S 37 (1) OF THE I.T. ACT. MOREOVER THE VARIOUS DECISIONS OF THE BOMBAY HIGH C OURT AND THE ITAT HAVE CLEARLY DISTINGUISHED THE HMTS CASE AND ITS A PPLICABILITY TO THE PREMIUM PAID FOR ACQUIRING LEASE HOLD RIGHT. THE HO NBLE ITAT MUMBAI SPECIAL BENCH, IN THE CASE OF MUKUND LTD. HAS DISCU SSED IN DETAIL THE JUDGEMENT OF HMT LTD. AND HELD THAT PREMIUM PAID FO R ACQUIRING THE LEASEHOLD RIGHT DOES NOT CONSTITUTE AN ADVANCE RENT . HONBLE ITAT MUMBAI, SPECIAL BENCH HAS FOLLOWED THE JURISDICTION AL HIGH COURTS VIEW IN THE CASE OF KHIMLIN PIPES LTD. WHEREIN THE JURISDICTIONAL HIGH COURT HAS HELD THAT PREMIUM PAID FOR ACQUIRING THE LEASE HOLD RIGHT CONSTITUTES A CAPITAL EXPENDITURE AND NOT AN ADVANC E PAYMENT OF RENT FOR THE LEASE PERIOD. IX) SECTION 194-I OF THE I. T. ACT CLEARLY PROVIDES THAT PAYMENT MADE BY A PERSON SHOULD BE IN THE NATURE OF AN INCOME B Y WAY OF RENT. THIS EXPRESSION EXPRESSLY REQUIRES THAT THE RECEIPT IN. THE HANDS OF THE LESSER/OWNER MUST CONSTITUTE THE INCOME BY WAY OF R ENT IN THE HANDS OF THE RECIPIENT. X) THE DEFINITION OF RENT CONTAINED IN EXPLANATION TO SECTION 194-I ALSO CLEARLY PROVIDES THAT THE PAYMENT MADE MUST BE FOR THE USE OF . LAND NO WHERE THE DEFINITION OF RENT ROPES IN THE CONSIDERATION PAID FOR ITA 4629/M/12 CO NO. 161/M/13 6 ACQUIRING LEASEHOLD RIGHT. THE APPELLANT (LESSEE) R EITERATES ITS CONTENTION THAT THE PREMIUM PAID FOR ACQUIRING LEAS EHOLD RIGHT IS NOT AN INCOME BY WAY OF RENT OF THE RECIPIENT FOR USE OF LAND. XI) THE VARIOUS JUDGMENTS RELIED UPON BY THE APPELL ANT(LESSEE) IN SUPPORT OF ITS CONTENTION CLEARLY CONFIRMS THE VIEW THAT THE PREMIUM PAID FOR ACQUIRING LEASEHOLD RIGHTS IN LAND CONSTIT UTES A CONSIDERATION OF CAPITAL NATURE AND NOT AN ADVANCE RENT FOR USE O F THE LAND OVER THE LEASE PERIOD. ON THE PLAIN READING OF THE LEASE AGREEMENT THE PRE VAILING FACTS OF THE CASE AND TAKING A WHOLISTIC VIEW OF FACTS AND CIRCU MSTANCES OF THE CASE AND THE POSITION IN LAW, SUCH PREMIUM PAID CAN NOT BE CONSIDERED TO BE A RENT WITHIN THE MEANING OF SECTION 194-I. THE APP ELLANT ONCE AGAIN SUBMITS THAT ITS SUBMISSION CONCERNING PREMIUM PAID IS FULLY SUPPORTED BY VARIOUS JUDICIAL PRONOUNCEMENTS WHICH ARE DISCUSSED IN DETAIL BY THE HONBLE ITAT SPECIAL BENCH, MUMBAI IN THE CASE OF MUKUND LTD. XII) RECENTLY THE HONBLE ITAT, MUMBAI HAD AN OCCAS ION TO CONSIDER SIMILAR ISSUE WHEREIN THE LEASE PREMIUM PAID BY NAT IONAL STOCK EXCHANGE OF INDIA LTD. TO MMRDA FOR ACQUIRING LEAS EHOLD RIGHT IN LAND AT BANDRA KURLA COMPLEX WAS CLAIMED TO BE A DEDUCTI BLE ADVANCE RENT OVER THE LEASE PERIOD. THE HONBLE ITAT FOLLOWED MU KUND LTD. S CASE AND CLEARLY HELD THAT SUCH PAYMENT OF LEASE PREMIUM CONSTITUTES A CAPITAL EXPENDITURE FOR ACQUIRING LEASE HOLD RIGHT AND NOT AN ADVANCE RENT FOR A LEASE PERIOD. XIII) SIMILAR ISSUE HAS BEEN ALREADY DECIDED BY YOU R HONOUR IN APPELLANTS OWN CASE FOR ASSTT. YEAR 2009-10 WHEREI N THE PREMIUM PAID FOR ACQUIRING THE LEASEHOLD RIGHTS VIDE LEASE DEED DT. 16.11.2004 HAS BEEN HELD TO BE ON CAPITAL ACCOUNT AND NOT RENT AS CONTEMPLATED U/S 194 I OF THE ACT. 6. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECOR D, THE LD. CIT(A) NOTED THAT A SIMILAR ISSUE INVOLVING IDENTICAL FACTS AND CIRCU MSTANCES WAS CONSIDERED AND DECIDED BY HIM IN DETAIL VIDE HIS ORDER PASSED INTER ALIA IN THE CASE OF SHREE NAMAN DEVELOPERS LTD. & SHREE NAMAN HOTELS PV T. LTD. ACCORDINGLY, FOLLOWING THE DECISION IN THE CASE OF SHREE NAMAN D EVELOPERS LTD. & SHREE NAMAN HOTELS PVT. LTD ON A SIMILAR ISSUE INVOLVING IDENTICAL FACTS, THE LD. CIT(A) HELD THAT THE PREMIUM PAID BY THE ASSESSEE I N RESPECT OF LEASED PLOT OF LAND TO MMRDA DURING THE YEAR UNDER CONSIDERATION F OR ALLOTMENT OF ITA 4629/M/12 CO NO. 161/M/13 7 ADDITIONAL BUILT UP AREA WAS NOT IN THE NATURE OF R ENT AS CONTEMPLATED U/S 194-I OF THE ACT AND THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE FROM THE PAYMENT OF PREMIUM MADE TO MMRDA. THE DEMA ND RAISED AGAINST THE ASSESSEE BY TREATING IT AS ASSESSEE IN DEFAULT VIDE AN ORDER PASSED BY THE A.O. U/S 201(1) & 201(1A) OF THE ACT FOR THE YEAR U NDER CONSIDERATION, THEREFORE, WAS CANCELLED BY THE LD. CIT(A). AGGRIE VED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS PREFERRED THIS APPEAL BEFOR E THE TRIBUNAL. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT A SIMILAR ISSUE INVOLVED IN THE CASE OF SHREE NAMAN HOTELS PVT. & S HREE NAMAN DEVELOPERS LTD. HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE VIDE AN ORDER DATED 14-08-2013 PASSED IN ITA NO. 688 TO 691/MUM/2 012 BY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH RENDERED IN THE C ASE OF M/S WADHWA & ASSOCIATES REALTORS PVT. LTD. VIDE ORDER DATED 3-7- 2013 PASSED IN ITA NO. 695/MUM/2012. IN THE CASE OF M/S WADHWA & ASSOCIAT ES REALTORS PVT. LTD. (SUPRA), A SIMILAR ISSUE WAS DECIDED BY THE TRIBUNA L IN FAVOUR OF THE ASSESSEE FOR THE FOLLOWING REASONS GIVEN IN PARA 9 TO 10 OF ITS ORDER DATED 3-7-2013 (SUPRA):- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE ORDER OF THE LOWER AUTHORITIES AND THE MATERIAL EVIDENCE BRO UGHT ON RECORD IN THE FORM OF PAPER BOOK AND THE JUDICIAL DECISIONS R ELIED UPON BY THE RIVAL PARTIES. THE ENTIRE GRIEVANCE REVOLVES AROUN D THE PREMIUM PAID BY THE ASSESSEE TO M/S. MMRDA LTD. FOR THE LEASEHOL D RIGHTS ACQUIRED BY THE ASSESSEE THROUGH THE LEASE DEED DT. 22 ND NOVEMBER, 2004. IT IS THE SAY OF THE REVENUE THAT THIS LEASE PREMIUM WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE FAILING WHICH THE ASSESSEE IS TO B E TREATED AS ASSESSEE IN DEFAULT. IT IS THE SAY OF THE ASSESSEE THAT SUC H LEASE PREMIUM IS IN THE NATURE OF CAPITAL EXPENDITURE AND THEREFORE THE RE IS NO QUESTION OF DEDUCTION OF TAX AT SOURCE. FURTHER, THE SAID LEAS E PREMIUM DOES NOT COME WITHIN THE PURVIEW OF THE DEFINITION OF RENT A S PROVIDED U/S. 194-1 OF THE ACT. 10. WE HAVE CAREFULLY PERUSED THE LEASE DEED AS EXH IBITED FROM PAGE- 1 TO 42 OF THE PAPER BOOK. A CAREFUL READING OF TH E SAID LEASE DEED TRANSPIRES THAT THE PREMIUM IS NOT PAID UNDER A LEA SE BUT IS PAID AS A PRICE FOR OBTAINING THE LEASE, HENCE IT PRECEDES TH E GRANT OF LEASE. ITA 4629/M/12 CO NO. 161/M/13 8 THEREFORE, 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 BUI LT UP ARE AND ALSO FOR GRANTING FREE OF FSI AREA, SUCH PAYMENT CANNOT BE EQUATED TO RENT. IT IS ALSO SEEN THAT THE MMRD IN EXERCISE OF POWE R U/S. 43 R.W. SEC. 37(1) OF THE MAHARASHTRA TOWN PLANNING ACT 1966, M RTP ACT AND OTHER POWERS ENABLING THE SAME HAS APPROVED THE PRO POSAL TO MODIFY REGULATION 4A(II) AND THEREBY INCREASED THE FSI OF THE ENTIRE G BLOCK OF BKC. THE DEVELOPMENT CONTROL REGULATIONS FOR BKC S PECIFY THE PERMISSIBLE FSI. PURSUANT TO SUCH PROVISIONS, THE ASSESSEE BECAME ENTITLED FOR ADDITIONAL FSI AND HAS FURTHER ACQUIRE D/PURCHASED THE ADDITIONAL BUILT UP AREA FOR CONSTRUCTION OF ADDITI ONAL AREA ON THE AFORESAID PLOT. THUS THE ASSESSEE HAS MADE PAYME NT TO MMRD UNDER DEVELOPMENT CONTROL FOR ACQUIRING LEASEHOLD LAND A ND ADDITIONAL BUILT UP AREA. THE DECISIONS OF THE TRIBUNAL IN THE CASE OF M/S. NATIONAL STOCK EXCHANGE (SUPRA) AND MUKUND LTD (SUPRA) HAVE BEEN WELL DISCUSSED BY THE LD. CIT(A) IS HIS ORDER. THE DECI SION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KHIMLINE PUMPS LTD. (SUPRA) SQUARELY AND DIRECTLY APPLY ON THE FACTS OF THE CAS E WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT PAYMENT FOR ACQUIRING LEASEHOLD LAND IS A CAPITAL EXPENDITURE. CONSIDERI NG THE ENTIRE FACTS IN TOTALITY IN THE LIGHT OF THE JUDICIAL DECISIONS VIS --VIS PROVISIONS OF SEC. 194-1, DEFINITION OF RENT AS PROVIDED UNDER THE SAI D PROVISION, WE DO NOT FIND ANY REASON TO TAMPER OR INTERFERE WITH THE FIN DINGS OF THE LD. CIT(A) WHICH WE CONFIRM. 8. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF WADHWA & ASSOCIATES REALTORS PVT. LTD. (SUPRA) AS WELL AS SHREE NAMAN HOTELS PVT. LTD . & SHREE NAMAN DEVELOPERS LTD. (SUPRA) DECIDED BY THE TRIBUNAL, WE RESPECTFULLY FOLLOW THE DECISIONS RENDERED IN THE SAID CASES BY THE CO-ORDI NATE BENCH OF THIS TRIBUNAL AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) HOL DING THAT THE LEASE PREMIUM PAID BY THE ASSESSEE TO MMRDA NOT BEING IN THE NATURE OF RENT AS CONTEMPLATED IN SECTION 194-I OF THE ACT, THE ASSES SEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE SAID PAYMENT AND HENCE COULD NOT BE TREATED AS THE ASSESSEE IN DEFAULT U/S 201(1) & 201(1A) OF THE ACT . THE APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. 9. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED A SOLITARY IDENTICAL GROUND WHICH READS AS UNDER:- ITA 4629/M/12 CO NO. 161/M/13 9 THE COMMISSIONER OF INCOME TAX (APPEALS) -14, MUMBA I [HEREINAFTER REFERRED TO AS CIT(A)] ERRED IN NOT APPRECIATING TH E FACT THAT STATE GOVERNMENT AND LOCAL AUTHORITY HAVE AN OVERRIDING T ITLE ON PAYMENT MADE TO MMRDA AND HENCE SAME DOES NOT REQUIRE DEDUC TION OF TAX AT SOURCE. THE APPELLANT SUBMITS THAT ON THE FACTS AND CIRCUMS TANCES OF THE CASE OF THE APPELLANT NO TDS IS REQUIRED TO BE DEDUCTED ON PREMIUM PAID TO MMRDA. 10. AS A RESULT OF OUR DECISION RENDERED HEREINABOV E WHILE DISMISSING THE APPEAL OF THE REVENUE, THE ISSUE RAISED IN THE CROS S OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS. THE CROSS OBJECTI ON FILED BY THE ASSESSEE IS, THEREFORE, DISMISSED AS INFRUCTUOUS. 11. IN THE RESULT, APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2013. . 'I E GH- J'(K 21-08-2013 H E SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; J'( DATED 21-08-2013 $.)(.!./ RK , SR. PS ITA 4629/M/12 CO NO. 161/M/13 10 'I E 0)LM NM- 'I E 0)LM NM- 'I E 0)LM NM- 'I E 0)LM NM-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. O () / THE CIT(A)- CONCERNED, MUMBAI 4. O / CIT CONCERNED, MUMBAI 5. M$R 0))( , , / DR, ITAT, MUMBAI E BENCH 6. %, S / GUARD FILE. 'I(! 'I(! 'I(! 'I(! / BY ORDER, !1M 0) //TRUE COPY// T T T T/ // /!U !U !U !U ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI