Income-tax Officer, V. M/s. Accurate Industries, Pune

ITA 2204/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1724 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 10-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAVE
• Keywords: Maximum Marginal Rate
• Section: 12A; 201(1); 10

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.2204/PN/2014 '% % / ASSESSMENT YEAR : 2011-12 ITO (TDS)-1, PUNE . / APPELLANT V/S M/S. ACCURATE INDUSTRIES, PLOT NO.46(C), SECTOR NO.10, PCNTDA, BHOSARI, PUNE 411026 PAN NO.PNEA00920D . / RESPONDENT / ASSESSEE BY : SHRI M.K. KULKARNI / DEPARTMENT BY : SHRI . HITENDRA NINAVE / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 26-09-2014 OF THE CIT(A)-V, PUNE RELATING TO ASSES SMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS AND DEVELOPERS OF PROPERTIES. DURING THE COURSE OF TDS VERIFICATION IN THE CASE OF PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY (IN SHORT PCNTDA) ON 07 -08-2012 IT / DATE OF HEARING :30.05.2016 / DATE OF PRONOUNCEMENT:30.05.2016 2 ITA NO.2204/PN/2014 WAS NOTICED THAT THE ASSESSEE HAD ENTERED INTO LEASE A GREEMENT FOR 99 YEARS WITH PCNTDA ON THE TERMS AND CONDITIONS LAID DOWN BY THE LESS OR IN THE LEASE DEED DATED 03-11-2010 FOR PLOT NO.46(C) IN SEC TOR NO.10 OF THE PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY, AS P ER THE TERMS OF LEASE DEED. AFTER GOING THROUGH THE VARIOUS CLAU SES OF THE LEASE DEED, THE AO CAME TO THE CONCLUSION THAT PROVISIONS OF SECTION 194I OF THE I.T. ACT ARE APPLICABLE IN RESPECT OF PAYMENT FOR ACQUISITION OF LEASEHOLD RIGHT FOR 99 YEARS AS THE SAME WAS NOTHING B UT RENT. HE ACCORDINGLY CONFRONTED THE ASSESSEE. THE ASSESSEE IN H IS REPLY SUBMITTED THAT AS PER THE LEASE AGREEMENT WITH PCNTDA THE LEASE IS FOR PERPETUITY AND IS NOTHING BUT A SALE TRANSACTION ONLY FOR THE PLOT IN QUESTION. THEREFORE, THE PROVISIONS OF SECTION 194I ARE NOT APPLICAB LE. 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND HELD THAT THE LEASE PREMIUM IS IN THE NATURE OF RENT AS DEFINED IN EXPLANATION TO SECTION 194I AND TDS WAS REQUIRE D TO BE MADE ON THE SAID AMOUNT. SINCE THE ASSESSEE HAS PAID LE ASE PREMIUM FOR PLOT NO.46(C) IN SECTOR 10 OF RS.2,54,67,840/- TO PCNTDA, T HEREFORE, THE AO TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT IN RESPECT OF NON DEDUCTION OF TDS ON LEASE RENT PAYMENT OF RS.2,54,67,840/-. HE ACCORDINGLY DETERMINED THE TDS U/S.201(1) AT RS.25,46,784 /- AND INTEREST U/S.201(1A) AT RS.7,13,099/-, THUS RAISING A TOTAL DE MAND OF RS.32,59,883/-. 4. IN APPEAL THE LD.CIT(A) ALLOWED THE APPEAL OF THE ASSES SEE AND DELETED THE DEMAND RAISED BY THE AO BY HOLDING THAT THE PAYMENT OF LEASE PREMIUM TO PCNTDA WAS A PRECONDITION FOR ENTERING IN TO LEASE AGREEMENT. FURTHER, STAMP DUTY HAS BEEN PAID ON THE M ARKET VALUE OF 3 ITA NO.2204/PN/2014 THE PLOT REPRESENTED BY LEASE PREMIUM. THEREFORE, THE AO WAS NOT JUSTIFIED IN RAISING DEMAND U/S.201(1)/201(1A) OF THE ACT. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LD.CIT (APPEALS) ERRED IN DELETING THE DEM AND RAISED OF RS. 32,59,883/- U/S 201(1)/201(1A) OF THE INCOME TAX ACT , 1961 IN RESPECT OF LEASE PREMIUM PAYMENT PAID TO PIMPRI CHINCHWAD NEW T OWNSHIP DEVELOPMENT AUTHORITY (PCNTDA). 2. THE LD.CIT (APPEALS) ERRED IN CONSIDERING THE FACT THAT THE PREMIUM PAID TO PCNTDA IS UPFRONT PAYMENT AS PRE-CONDITION FO R ENTERING INTO LEASE AGREEMENT. 3. THE LD.CIT (APPEALS) ERRED IN NOT APPRECIATING T HE FACT THAT THE DEED ENTERED INTO BY THE DEDUCTOR WITH PCNTDA WAS NOT A T RANSFER DEED BUT A LEASE DEED AND EXPLANATION TO SECTION 1941 CLEARLY STI PULATES THAT ANY PAYMENT BY WHATEVER NAME CALLED UNDER ANY LEASE DEED /AGREEMENT IS TO BE TAKEN AS RENT FOR TDS PURPOSE. 3. THE APPELLANT CRAVES LEAVES TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET REFER RING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF I TO VS. SHRI AJAY N. YERWADEKAR VIDE ITA NO.636/PN/2014 ORDER DATED 14-08-2015 SUBMITTED THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE TR IBUNAL AND THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED. THERE FORE, THIS BEING A COVERED MATTER THE GROUNDS RAISED BY THE REV ENUE SHOULD BE DISMISSED. HE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. ITAO VS. SHREE NAMAN DEVELOPERS LTD. AND VICE VER SA ITA NO.686 & 687/MUM/2012 ORDER DATED 14-08-2013. 2. ITO VS. M/S. WADHWA & ASSOCIATES REALTORS PVT. LTD. AN D VICE VERSA ITA NO.695/MUM/2012 ORDER DATED 03-07-2013. 3. ITO VS. M/S. NAVI MUMBAI SEZ PVT. LTD. ITA NOS.73 8 TO 741/MUM/2012 ORDER DATED 16-08-2013. 4 ITA NO.2204/PN/2014 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND FAIRLY CONCEDED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE AND AGAINST THE REVENUE BY THE ORDER OF THE TRIBUNAL. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDER OF THE AO AND THE CIT(A) AND THE VAR IOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. WE FIND TH E AO IN THE INSTANT CASE HAS TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT FOR NON DEDUCTION OF TAX AT SOURCE FROM THE LEASE PREMIUM PAID TO PCNTDA AMOUNTING TO RS.2,54,67,840/- FOR ACQUISITION OF LEASEHOLD RIG HT FOR 99 YEARS. WE FIND IN APPEAL THE LD.CIT(A) FOLLOWING VARIOUS DECISIONS OF THE MUMBAI BENCH OF THE TRIBUNAL DELETED SUCH DEMAND RAISED BY THE AO U/S.201(1)/201(1A). WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI AJAY N. YERWADEKAR (SUPRA). THE TRIBUNAL AFTER CONSIDERING VARIOUS DECISIONS UPHELD THE ORDER OF THE CIT(A) AND DISMISSED THE APPEAL FILED BY THE REVENUE IN RESPECT OF LEASE PREMIUM PAID TO PCNTDA. THE R ELEVANT OBSERVATION OF THE TRIBUNAL FROM PARA 6 TO 8 OF THE ORDER READ AS UNDE R : 6. AFTER HEARING BOTH THE SIDES, WE FIND AN IDENTICA L ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF ITO VS. PREETAM ME DICAL FOUNDATION & RESEARCH CENTRE VIDE ITA NO.190/PN/2014 ORDER DATED 16-01-2015 WHEREIN SIMILAR DEMAND U/S.201(1) & 201(1A) WAS RAISED BY THE AO IN RESPECT OF LEASE PREMIUM PAID TO PCNTDA. THE CIT(A) DELETED SUCH DEMAND AND ON APPEAL FILED BY THE REVENUE, THE TRIB UNAL DISMISSED THE APPEAL FILED BY THE REVENUE BY HOLDING AS UNDER : 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION T O THE DEMAND RAISED UNDER SECTIONS 201(1) AND 201(1A) OF THE ACT IN RESPECT OF THE LEASE PREMIUM PAID TO PIMPRI CHINCHWAD NEW TOWNS HIP DEVELOPMENT AUTHORITY (PCNTDA). IN THE FACTS OF THE CASE BEFORE US, THE ASSESSEE HAD ENTERED INTO 99 YEARS LEASE AGREEMENT TH ROUGH ITS CHAIRMAN WITH PCNTDA FOR USING 3261 SQ. MTRS. OF LAND LOCATED ON PLOT NO.1, IN SECTOR 13, CHIKHALI, TALUKA HAVELI, P UNE. THE SAID LAND WAS TO BE USED FOR EDUCATION PURPOSES AS PER CLAUSE (N) O F THE LEASE DEED. THE ASSESSEE PAID LEASE PREMIUM OF RS.1,37,36,963/ - FOR THE SAID PLOT AND FURTHER AGREED TO PAY SUM OF RS.100/- P ER ANNUM FOR THE ENTIRE PERIOD OF LEASE. THE ASSESSING OFFICER (TDS) WAS OF THE 5 ITA NO.2204/PN/2014 VIEW THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOU RCE UNDER SECTION 194 I OF THE ACT AT THE TIME OF PAYMENT OF L EASE PREMIUM TO PCNTDA. THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE T O THE ASSESSEE AND ALSO ISSUED SUMMONS TO THE DEDUCTOR. IN REPLY, THE ASSESSEE EXPLAINED THAT THE TRANSACTION BETWEEN IT AND P CNTDA WAS A TRANSACTION OF SALE AND FURTHER APPROPRIATE TAX RET URN HAD BEEN FILED BY IT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE TRANSACTION BETWEEN THE PARTIES WAS NOT THAT OF TRANSFER, BUT OF L EASE AND THERE WAS NO TRANSFER OF OWNERSHIP OF THE PROPERTY, BUT THE SAME WAS LEASED FOR USE EITHER FOR COMMERCIAL OR RESIDENTIAL P URPOSES AS APPROVED BY THE LESSOR. HOWEVER, THE ASSESSING OFFICER REFERRED TO THE VARIOUS RESTRICTIONS ON THE LESSEE / ASSESSEE PUT UP BY THE LESSOR AND IT WAS OBSERVED BY THE ASSESSING OFFICER THAT TH IS WAS NOT A CASE OF FREEHOLD TRANSFER OR SALE AND THE ASSESSEE WAS NO T THE ABSOLUTE OWNER OF THE PROPERTY. THE ASSESSING OFFICER THUS, CONCLUDED THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE UNDER SECTION 194 I OF THE ACT ON THE LEASE PREMIUM PAID TO PCNTDA. THE ASSESSEE HAVING FAILED TO DEDUCT TAX AT SOURCE, WAS HELD TO BE IN DEFAULT UNDER SECTION 201(1) OF THE ACT AT RS.13,73,6 96/- AND FURTHER INTEREST UNDER SECTION 201(1A) OF THE ACT WAS CHARGED AT RS.82,416/-. RELIANCE WAS PLACED ON THE RATIO LAID D OWN BY CHENNAI BENCH OF THE TRIBUNAL IN FOXCONN INDIA DEVELOPER (P ) LTD. VS. ITO (TDS) (SUPRA). 6. THE CIT(A) AFTER CONSIDERING THE FACTS AND REPLY F ILED BY THE ASSESSEE, OBSERVED THAT NO DOUBT, AFTER 99 YEARS OF LEASE, THE LEASE HOLD RIGHT EXPIRED AND THE LESSOR WAS VESTED WITH THE F ULL RIGHTS ON THE SAID PLOT OF LAND, WITH THE OPTION EITHER TO REN EW THE LEASE FOR FURTHER PERIOD AND TAKE BACK THE POSSESSION OF THE LAND . HOWEVER, THE PRELIMINARY CLAUSE OF THE LEASE AGREEMENT REFLECT S THAT THE PAYMENT OF LEASE PREMIUM WAS A PRE-CONDITION FOR ENTE RING INTO LEASE AGREEMENT. THE CIT(A) HAS REPRODUCED THE PRELI MINARY CLAUSE OF THE LEASE AGREEMENT AT PAGE 7 OF THE APPELLATE OR DER, WHICH ARE NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. THE C IT(A) THUS, HELD THAT THE PAYMENT OF LEASE PREMIUM OF RS.1,37,36,963/- WAS A PRE- CONDITION FOR ENTERING INTO THE LEASE AGREEMENT AND THE SAME WAS NOT UNDER THE LEASE DEED, THEREFORE, THE PAYMENT OF LEASE PREMIUM FELL OUTSIDE THE PURVIEW OF DEFINITION OF RENT AS PRO VIDED UNDER SECTION 194I OF THE ACT. IT WAS FURTHER POINTED OUT BY THE CIT(A) THAT THERE IS NO MERIT IN THE RELIANCE PLACED UPON THE DE CISION OF CHENNAI BENCH OF THE TRIBUNAL IN FOXCONN INDIA DEVELOPER (P ) LTD. VS. ITO (TDS) (SUPRA) AS THE SAME WAS DISTINGUISHABLE ON FACTS. I N THE FACTS OF THE CASE BEFORE THE TRIBUNAL, THE ISSUE IN QUESTION WAS UPFRONT PAYMENT OF LEASE AND FURTHER THE SAID UPFRONT PAYMENT WAS PART OF THE CONDITIONS FOR ACQUIRING LEASEHOLD RIGHTS, UNLIKE THE PRESENT CASE WHERE, THE PAYMENT OF LEASE PREMIUM WAS A PRE-CONDITI ON FOR ENTERING INTO A LEASE AGREEMENT. THE CIT(A) PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN NAVI MUM BAI SEZ(P) LTD IN ITA NO.738 TO 7741/MUM/2012, RELATING TO ASSESSM ENT YEARS 2006-07 TO 2009-10, VIDE ORDER DATED 12.08.2013, IN ORDER TO HOLD THAT THE PAYMENT OF LEASE PREMIUM TO PCNTDA BEING A PRE-CONDITION FOR ENTERING INTO LEASE AGREEMENT, COULD NOT BE SAID TO BE PAID UNDER THE TERMS OF LEASE AGREEMENT. FURTHER, STAMP DUTY HAD BEEN PAID ON THE MARKET VALUE OF THE PLOT REPRESENTED BY LEASE PRE MIUM. IN VIEW 6 ITA NO.2204/PN/2014 THEREOF, THE ASSESSING OFFICER WAS DIRECTED TO DELETE TH E DEMAND CREATED UNDER SECTIONS 201(1) AND 201(1A) OF THE ACT. 7. THE ISSUE ARISING IN THE PRESENT APPEAL IS SQUARELY CO VERED BY THE RATIO LAID DOWN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITO VS. CAMP EDUCATION SOCIETY (SUPRA), WHEREIN IT WAS HEL D AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS AN EDUCATIONAL SOCIETY RE GISTERED UNDER SECTION 12A OF THE ACT. THE ASSESSEE WAS RUN NING VARIOUS SCHOOLS AND COLLEGES IN THE CITY OF PUNE. DURING T HE YEAR UNDER CONSIDERATION, IN ORDER TO ESTABLISH ANOTHER SCHOOL IN PIMPRI CHINCHWAD AREA, THE ASSESSEE IN REPLY TO AN ADVERTI SEMENT BY 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. TH E PREMIUM WITHIN 3 MONTHS OF THE LETTER OF ALLOTMENT. IN CAS E SUCH PREMIUM WAS NOT PAID WITHIN PERIOD OF 3 MONTHS, 25% OF THE TENDER DEPOSIT WAS TO BE FORTIFIED AND BALANCE AMOU NT WAS TO BE REFUNDED WITHOUT ANY INTEREST. THE TENDER DOCUM ENT STATED THAT THE TENDER WAS FOR THE PURPOSE OF SALE OF RESE RVED PLOTS AND AS PER THE DOCUMENT FULL PREMIUM WAS TO BE PAID TO PCNTDA AND LEASE AGREEMENT WOULD BE ENTERED WITH TH E PARTY. THE ASSESSEE ENTERED INTO A LEASE AGREEMENT WITH PC NTDA FOR 99 YEARS AND THE LEASE RENT WAS RS.100/- PER ANNUM FOR THE PERIOD OF 99 YEARS. THE ASSESSEE ACCORDINGLY, DEPO SITED THE PREMIUM AMOUNT OF RS.2,20,24,860/-. AFTER RECEIVIN G THE PREMIUM AMOUNT, THE LICENSER I.E. PCNTDA AGREED TO EXECUTE LEASE DEED TO CONVEY / TRANSFER / ASSIGN THE LEASEH OLD RIGHTS. THE LEASE DEED AUTHORIZES THE ASSESSEE TO BUILD / C ONSTRUCT ANY BUILDING ON THE SAID PLOT OF LAND. THE CASE OF THE ASSESSEE WAS THAT THE PAYMENT OF PREMIUM WAS A PRE-CONDITION FOR OBTAINING THE LEASE RIGHTS AND IT WAS ONLY AFTER PA YMENT OF THE LEASE PREMIUM, THE LEASE AGREEMENT WAS ENTERED INTO AND BUNDLE OF RIGHTS WERE OBTAINED BY THE ASSESSEE. 7. THE ASSESSING OFFICER HELD THE ASSESSEE TO BE DE FAULT IN RESPECT OF THE TDS PAYABLE ON SUCH LEASE RENT PAYME NT TO PCNTDA. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE CHENNAI BENCH OF THE TRIBUNAL IN FOX CONN INDIA DEV ELOPER (P) LTD. (SUPRA). THE ASSESSEE WAS HELD TO BE IN DEFAU LT FOR NON- DEDUCTION OF TAX ON SOURCE UNDER SECTION 194I OF TH E ACT ON THE LEASE PREMIUM PAID TO PCNTDA AND DEMAND UNDER SECTI ON 201(1) OF THE ACT WAS RAISED AND INTEREST UNDER SEC TION 201(1A) OF THE ACT WAS CHARGED, RAISING A DEMAND OF RS.22,90,585/-. 8. THE CIT(A) VIDE PARA 8 REFERRED TO THE PRELIMINA RY CLAUSES OF THE AGREEMENT ENTERED INTO BETWEEN ASSES SEE AND PCNTDA AND POINTED OUT THAT THE LEASE PREMIUM FINDS MENTION IN THE LEASE DEED BUT THE SAID PAYMENT OF LEASE PRE MIUM WAS A PRE-CONDITION FOR ENTERING INTO LEASE AGREEMENT. T HE CIT(A) THUS, HELD THAT SAME WAS NOT UNDER THE LEASE DEED A ND THE PAYMENT OF LEASE PREMIUM FALLS OUTSIDE THE PURVIEW OF DEFINITION OF RENT AS SPECIFIED IN SECTION 194I OF THE ACT. THE 7 ITA NO.2204/PN/2014 CIT(A) FURTHER OBSERVED FROM THE RATIO LAID DOWN IN THE CASE OF FOX CONN INDIA DEVELOPER (P) LTD. (SUPRA) WAS DISTI NGUISHABLE ON THE FACTS AS IN THAT CASE ISSUE IN QUESTION WAS UPFRONT PAYMENT AND NOT LEASE PREMIUM. FURTHER, UPFRONT PA YMENT WAS PART OF CONSIDERATION FOR ACQUIRING LEASEHOLD R IGHTS UNLIKE THE PRESENT CASE WHERE PAYMENT OF LEASE PREMIUM WAS PRE- CONDITION FOR ENTERING INTO LEASE AGREEMENT AND THE REFORE THE FACTS OF THE CASE WERE CLEARLY DISTINGUISHABLE. FU RTHER 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 TH E ACT. 9. WE FIND THAT SIMILAR ISSUE OF PAYMENT OF LEASE P REMIUM AROSE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN TH E CASE OF NAVI MUMBAI SEZ (P) LTD. IN ITA NOS.738 TO 740/MUM/ 2012 FOR ASSESSMENT YEARS 2006-07 TO 2009-10, WHEREIN TH E TRIBUNAL IN ITS ORDER DATED 12.08.2013, HELD THAT LEASE PREM IUM PAID BY THE ASSESSEE TO THE CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. (CIDCO) FOR ACQUIRI NG DEVELOPMENT AND LEASEHOLD RIGHTS FOR A PERIOD OF 60 YEARS, WAS NOT REQUIRED TO BE SUBJECT TO DEDUCTION AT SOURCE U NDER SECTION 194I OF THE ACT. FURTHER ANOTHER BENCH OF THE MUMB AI TRIBUNAL IN THE CASE OF M/S. WADHWA ASSOCIATES IN ITA NO.695/MUM/2012, VIDE ORDER DATED 03.07.2013, HELD THAT TDS WAS NOT REQUIRED TO BE DEDUCTED UNDER SECTION 1 94I OF THE ACT IN RESPECT OF PAYMENT OF LEASE PREMIUM TO M/S. MMRD LTD. 10. IN VIEW OF ABOVE SAID FACTS AND CIRCUMSTANCES, WHEREIN THE LEASE PREMIUM WAS PAID TO PCNTDA BY THE ASSESSE E AS A PRE-CONDITION FOR ENTERING INTO A LEASE AGREEMENT, THE SAME CANNOT BE SAID TO HAVE BEEN PAID CONSEQUENT TO THE LEASE AGREEMENT EXECUTED BETWEEN THE PARTIES. FURTHER, T HE CIT(A) HAS GIVEN A FINDING THAT STAMP DUTY HAD BEEN PAID O N THE MARKET VALUE OF THE PLOT REPRESENTED BY THE LEASE P REMIUM, WHICH HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPA RTMENTAL REPRESENTATIVE FOR THE REVENUE. RELYING UPON THE R ATIO LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN THREE D IFFERENT CASES, WE UPHOLD THE ORDER OF CIT(A) IN HOLDING THA T THE LEASE PREMIUM PAID BY THE ASSESSEE IS OUTSIDE THE PURVIEW OF SECTION 194I OF THE ACT AND THE ASSESSING OFFICER WAS NOT J USTIFIED IN RAISING THE DEMAND UNDER SECTION 201(1) AND 201(1A) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE REVENUE A RE THUS, DISMISSED. 8. FOLLOWING THE SAME PARITY OF REASONING, WE HOLD TH AT WHERE THE LEASE PREMIUM PAID TO PCNTDA WAS A PRE-CONDITION FOR ENTERING INTO THE LEASE AGREEMENT, THE SAME NOT BEING PAID CON SEQUENT TO THE EXECUTION OF THE LEASE AGREEMENT, CANNOT BE SAID TO BE PAYMENT IN LIEU OF RENT AS ENVISAGED UNDER SECTION 194 I OF THE A CT. IN ADDITION, THE ASSESSEE HAD PAID STAMP DUTY ON THE MARKET VALUE OF THE PLOT REPRESENTED BY THE LEASE PREMIUM AND THE SAID FINDING OF THE CIT(A) HAVING NOT BEEN CONTROVERTED BY THE LEARNED DEPARTM ENTAL REPRESENTATIVE FOR THE REVENUE, WE FIND NO MERIT IN THE APPEAL FILED BY THE REVENUE. ACCORDINGLY, WE UPHOLD THE ORDER O F CIT(A) AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 8 ITA NO.2204/PN/2014 7. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL T O THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF PREETAM MEDIC AL FOUNDATION & RESEARCH CENTRE (SUPRA), THEREFORE, RESPECTFULLY FOLL OWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THE DEMAND RAISED U/S.201(1)/201(1A) OF THE I.T. ACT IN RESPECT OF LEASE PREMIUM PAID TO PCNTDA. ACCORDINGLY , THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVENU E ARE DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 9. SINCE THE ORDER OF THE CIT(A) IS IN CONSONANCE WITH THE VIEW TAKEN BY THE TRIBUNAL IN THE CASE OF SHRI AJAY N. YERWADEKAR CIT ED (SUPRA), THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THE AD DITION. GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEAR ING ITSELF, I.E. ON 30 TH MAY, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) ' / JUDICIAL MEMBER / ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 30 TH MAY, 2016. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ( ) S / THE CIT(A)-V, PUNE 4. ( S / THE CIT-V, PUNE 5. 6. + ., ., IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , + //TRUE COPY// 2 . / SR. PRIVATE SECRETARY ., IQ.KS / ITAT, PUNE