DCIT TDS CIR THANE, MUMBAI V. PARADISE INFRASTRA-CON P.LTD, KALYAN

ITA 6193/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92643 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 09-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: HARSH BHUTA
• Keywords: Capital asset; Maximum Marginal Rate; Capital expenditure
• Section: 37(1); 201(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 THE DCIT (TDS), CIRCLE, THANE. / VS. M/S. PARADISE INFRA - CON PVT. LTD., AMIT ASHIANA, NR. GOAL MAIDAN, OPP. DHARAMDAS SOC., BHAJI MARKET, ULHASNAGAR, KALYAN 421 002. ./ ./ PAN/GIR NO. : AAECP 1110D ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI PREMANAND J RESPONDENT BY SHRI HARSH BHUTA ' #$ / DATE OF HEARING : 13/05/2015 ' #$ / DATE OF PRONOUNCEMENT : 13/05/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-II, THANE DATED 24/07/2012 FOR ASSESSMENT YEAR 2010- 11. GROUNDS OF APPEAL READ ASUNDER: 1. THE LEARNED CITCA) HAS FAILED TO APPRECIATE THAT THE PROCEEDINGS FOR ASSESSMENT OF INCOME OF THE PAYEE STAND ON A DIFFER ENT FOOTING FROM THE PROCEEDINGS U/S 201 IN THE CASE OF THE DEDUCTOR WH ERE LIABILITY TO DEDUCT TDS IS TO BE DETERMINED AS PER THE SPECIFIC PROVISIONS ENSHRINED IN SECTION 194I OF THE ACT. 2. THE LEARNED CIT CA) HAS ERRED IN LAW AND ON FACT S IN FAILING TO APPRECIATE THAT TDS PROVISIONS IN CHAPTER XVIIB ARE ATTRACTED EVEN IN RESPECT OF ACQUISITION OF CAPITAL ASSETS AS EVIDENT FROM THE P ROVISION OF LAW CONTAINED IN SEC. 194LA OF THE I.T.ACT, 1961. ' 3. THE LEARNED CIT CA) HAS ERRED IN LAW AND ON FACT S IN ENGAGING INTO ACADEMIC EXERCISE OF APPROBATE AND REPROBATE WITHOU T APPRECIATING THE ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 2 ESTABLISHED LEGAL PRINCIPLE THAT CHAPTER XVIIB OF W HICH SECTION 194 I IS A PART, CONTAINS A SELF CONTAINED CODE FOR THE PURPOSE OF T DS AND OTHER SECTIONS OF THE I.T.ACT WHICH INVOLVE INTERPRETATIVE ISSUES SUCH AS REVENUE OR CAPITAL HAVE NO BEARING ON THE POINT IN ISSUE. 4. THE LEARNED CIT CA) HAS ERRED IN LAW AND ON FACT S OF CASE IN HOLDING THAT THE AMOUNT PAID BY M/S PARADISE INFRA- CON PVT. LTD TO CITY INDUSTRIAL DEVELOPMENT CORPORATION C SHORTLY CALLED 'CIDCO LTD ') AS PREMIUM' FOR ACQUIRING LEASE HOLD RIGHTS AND ADDITIONAL FSI IN R ESPECT OF THE LEASED PLOT IS NOT IN THE NATURE OF RENT AS DEFINED U/S 1941 OF TH E ACT. 5. THE LEARNED CIT CA) HAS ERRED IN LAW AND ON FACT S OF CASE IN HOLDING THAT TAX DEDUCTION U/S 1941 IS NOT REQUIRED ON THE AMOUN T LEASE PREMIUM PAID BY M/S PARADISE INFRA - CON PVT. LTD TO CIDCO LTD. 6. THE LEARNED CIT CA) HAS ERRED IN LAW AND ON FAC TS IN FAILING TO APPRECIATE THAT THE AMENDED DEFINITION OF 'RENT' IN EXPLANATIO N TO SECTION 1941 OF THE ACT W.E.F 13-07-2006 IS VERY COMPREHENSIVE AND COVERS ' ANY PAYMENTS' BY WHATEVER NAME CALLED' UNDER ANY LEASE, SUB LEASES, TENANCY OR ANY OTHER AGREEMENTS OR ARRANGEMENTS' AND WOULD INCLUDE ALL P AYMENTS MADE BY M/S. PARADISE INFRA - CON PVT. LTD TO CIDCO LTD UNDER TH E LEASE AGREEMENTS. 7. THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACT S OF CASE IN HOLDING THAT THE PREMIUM UNDER A LEASE IS HELD TO BE A CAPITAL R ECEIPT WITHOUT APPRECIATING THE FACT THAT THE DEFINITION OF RENT IS ALL ENCOMPA SSING AND COVERS' ANY PAYMENTS, BY WHATEVER NAME CALLED,' UNDER A LEASE O R SUB-LEASE, TENANCY OR ANY OTHER AGREEMENT OR ARRANGEMENT. 8. THE APPELLANT CRAVES LEAVES TO AMEND OR LATER A NY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HE ARING OF THE CASE OR THEREAFTER. 2. A SURVEY ACTION WAS CONDUCTED AT CITY & INDUSTRI AL DEVELOPMENT CORPORATION (CIDCO) ON 4/2/2011 AND IT WAS NOTICED THAT CIDCO HAD RECEIVED LEASE PREMIUM OF RS.13,63,73,734/- ON THE SALE OF PLOT TO THE ASSESSEE COMPANY. ACCORDING TO AO SUCH PAYMENT MAD E BY THE ASSESSEE BEING LEASE PREMIUM WAS LIABLE FOR DEDUCTION OF TAX UNDER SECTION 194-I OF THE INCOME TAX ACT, 1961 (THE ACT) AND SINCE TAX WA S NOT DEDUCTED AO RAISED THE DEMAND OF RS.1,95,70,459/- UNDER SECTION 201(1) AND 201(1A) OF THE ACT. LD. CIT(A) HAS DELETED THE ADDITION ON TH E BASIS OF DECISION OF ITAT MUMBAI, IN WHICH ON SIMILAR ISSUE THE TAX DEMAND HAS BEEN DELETED. ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 3 3. LD. DR RELIED UPON THE ORDER PASSED BY AO AND AS AGAINST THAT LD. AR OF THE ASSESSEE HAS RELIED UPON THE FOLLOWING DECIS ION. 1. ORDER OF MUMBAI TRIBUNAL IN THE ASSESSEES OW N CASE FOR A.Y 2008-09 IN ITA NO.4592/MUM2012 2. ORDER OF MUMBAI TRIBUNAL IN THE CASE OF ITO (TD S) V. WADHWA & ASSOCIATES REALTORS (P) LTD. (146 ITD 694) 3. ORDER OF MUMBAI TRIBUNAL IN THE CASE OF TRO (TD S) V/S. M/S. SHREE SAWAN BUILDERS & DEVELOPERS PVT. LTD., ITA NO.6148 & 6149/M/2012 ORDER DATED 12/06/2014. COPY OF ALL THESE DECISIONS ARE PLACED IN THE PAPER BOOK. 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. MUMBAI TRIBUNAL HAS BEEN TAKING C ONSISTENT VIEW THAT ON LEASE PAYMENT MADE BY THE ASSESSEE TO CIDCO THERE W AS NO LIABILITY OF DEDUCTION OF TAX. FOR THE SAKE OF BREVITY REFERENC E TO ALL THESE DECISION IS NOT MADE. REFERENCE IS MADE TO THE DECISION IN THE CASE OF TRO(TDS) V. M/S. SHREE SAWAN BUILDERS & DEVELOPERS PVT.(SUPRA) WHEREIN BOTH OF US ARE PARTY AND RELEVANT PORTION OF THE SAID DECISION IS REPRODUCED BELOW: 3.1 REVENUE HAS RAISED AS MANY AS 12 GROUNDS TO CON TEST DELETION MADE BY LD. CIT(A) WHO HAS DELETED THIS DEMAND FOLLOWING THE JUDICIAL PRECEDENCES MENTIONED IN THE IMPUGNED ORDER PASSED BY LD. CIT(A ). 4. DURING THE COURSE OF HEARING IT WAS SUBMITTED BY LD. AR THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF MUMBAI ITAT PASSED IN SEVERAL CASES. IT WAS SUBMITTED THAT IDENTICAL GRO UNDS WERE RAISED BY THE REVENUE AGAINST SIMILAR DELETION IN THE CASE OF ITO VS. SHAH GROUP BUILDERS LTD. WHICH IS DECIDED BY ITAT VIDE ITS ORDER DATED 14/8/2013 IN ITA NO.4523/MUM/2012. HE HAS PLACED COPY ON OUR RECORD AND COPY WAS ALSO GIVEN TO LD. DR. HE SUBMITTED THAT SIMILAR VIEW HA S BEEN TAKEN IN THE CASE OF ITO VS. DHIRENDRA RAMJI VORA VIDE ORDER DATED 9/4/2 014 IN ITA NO.3179/MUM/2012, COPY OF THIS ORDER IS ALSO PLACED ON OUR RECORD AND GIVEN TO LD. DR. THUS, IT WAS PLEADED BY LD. AR THAT TH E ISSUE RAISED BY THE REVENUE IN THE PRESENT APPEAL IS IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY REVENUES APPEAL SHOULD BE DISMISSED. ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 4 5. HOWEVER, ON THE OTHER HAND, LD. DR RELIED UPON O RDER PASSED BY AO AND LD. DR COULD NOT DISPUTE THAT THE ISSUE IS COVE RED IN FAVOUR OF THE ASSESSEE BY THE AFOREMENTIONED DECISION AND NO CONT RARY DECISION WAS ALSO REFERRED. 6. IN VIEW OF THE SITUATION, AFTER HEARING BOTH THE PARTIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF CO-ORDINAT E BENCH, WE DECIDE THE ISSUE RAISED BY THE REVENUE IN THESE APPEALS IN FAV OUR OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS THE CONCLUSION OF THE ORDE R PASSED BY THE TRIBUNAL IN THE CASE OF ITO VS.SHAH GROUP BUILDERS LTD.,(SUP RA) IS REPRODUCED BELOW. 2. ALTHOUGH THE REVENUE HAS RAISED AS MANY AS 12 G ROUNDS IN THIS APPEAL, THE SOLITARY ISSUE ARISING OUT OF THE SAME IS WHETHER THE ASSESSEE IS REQUIRED TO DEDUCT TAX AT SOURCE FROM T HE PAYMENT OF LEASE PREMIUM MADE TO CIDCO DURING THE YEAR UNDER CONSIDE RATION U/S 194- 1 OF THE INCOME TAX ACT, 1961 (THE ACT). 3. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH IS APPEAL ARE THAT THE ASSESSEE WAS ALLOTTED CERTAIN PLOTS OF LAND IN KHARGHAR, NAVI MUMBAI ON LEASE SUBJECT TO PAYMENT OF LEASE PREMIUM TO CIDCO. DURING THE YEAR UNDER CONSIDERATION, PART PAYMENT O F SUCH LEASE PREMIUM WAS MADE BY THE ASSESSEE TO CIDCO. ACCORDIN G TO THE A.O., THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE F ROM THE PAYMENT OF LEASE PREMIUM MADE TO CIDCO AS PER THE PROVISIONS O F SECTION 194-1 OF THE ACT AND SINCE NO SUCH TAX WAS DEDUCTED BY THE A SSESSEE FROM THE SAID PAYMENTS, HE ISSUED NOTICE TO THE ASSESSEE REQ UIRING IT TO SHOW CAUSE AS TO WHY IT SHOULD NOT BE TREATED AS THE ASS ESSEE IN DEFAULT FOR ITS FAILURE TO DEDUCT THE TAX AT SOURCE FROM THE PA YMENT OF LEASE PREMIUM MADE TO CIDCO. THE ASSESSEE FILED ITS REPLY TO SHOW CAUSE NOTICE ISSUED BY THE A.O. EXPLAINING ITS STAND ON T HE ISSUE AND AFTER CONSIDERING AND DISCUSSING THE SAME IN DETAIL, THE A.O. HELD THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE FROM TH E PAYMENT MADE TO CIDCO ON ACCOUNT OF LEASE PREMIUM AND TREATED THE A SSESSEE IN DEFAULT FOR FAILURE TO DO SO FOR THE FOLLOWING REAS ONS GIVEN IN THE ORDER PASSED U/S 201(1) AND 201(1A) OF THE ACT: AT THE OUTSET, IT NEEDS TO BE MENTIONED THAT THE A SSESSEES REPRESENTATIVE HAS VEHEMENTLY CLAIMED THAT THE PAYM ENT REFERRED IN SHOW CAUSE DOES NOT BEAR THE CHARACTER OF RENT MENTIONED IN SECT. 1941 AND THEREFORE THERE IS NO R EQUIREMENT OF DEDUCTION OF TAX FROM SUCH PAYMENT MADE TO CIDCO. T HE LAND UNDER QUESTION HAS BEEN GIVEN BY THE LESSOR TO THE ASSESSEE ON LEASE AND FOR WHICH IT HAS PAID THE PREMIUM OF RS. 70,85,01,870/-. THIS LUMP-SUM PAYMENT MADE BY THE L EASEE I.E. M/S. SHAH GROUP BUILDERS LTD. (ASSESSEE) HAS B EEN MADE TO AVOID RECURRING PAYMENT BY INSTALMENTS BY THE THEM TO THE LESSOR. THE PAYMENT SO MADE BY THE ASSESSEE IS A RE NT FOR ENJOYMENT AND OCCUPANCY OF THE IMPUGNED LAND. THE O NE TIME PAYMENT DOES NOT CHANGE THE CHARACTER OF THIS PAYME NT AND THEREFORE IT SQUARELY FALLS WITHIN THE PARAMETER OF SECTION 1941. THIS INFERENCE ALSO GATHERS SUPPORT FROM THE JUDICI AL ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 5 PRONOUNCEMENTS OF HONBLE KARNATAKA HIGH COURT IN T HE CASE OF CIT V/S HMT LIMITED - 203 ITR 820 AND THAT OF HONB LE CALCUTTA HIGH COURT IN THE EASE OF BRAITHWAITE & CO. (1) LTD . V/S CIT 111 ITR 542. BOTH THE HIGH COURTS IN THESE CASES HA VE RULED THAT LEASE PREMIUM PAID IN LUMP SUM IS NOTHING BUT THE RENT PAID IN ADVANCE TO OBVIATE PERIODICAL PAYMENTS. GOING BY THE VERDICT OF THESE HONBLE HIGH COURTS, THE RULINGS ARE SQUAR ELY APPLICABLE TO THE FACTS OF THE INSTANT CASE. THEREFORE, THE OB LIGATION WAS CAST UPON THE ASSESSEE TO DEDUCT TAX AT SOURCE FROM THE LEASE PREMIUM PAID TO CIDCO AS PER THE PROVISIONS U/S 194 -I OF THE INCOME TAX ACT, 1961. IT IS FURTHER NECESSARY TO MENTION THAT ADMITTEDLY VIDE LEASE AGREEMENT REFERRED TO ABOVE THE ASSESSEE HAS ACQUIR ED RIGHT OF OCCUPANCY AND RIGHT OF ENJOYMENT OF THE IMPUGNED PL OT, AND PAYMENT MADE FOR AVAILMENT OF SUCH, RIGHT IS RENT A ND RENT ONLY AND NOTHING ELSE. BY CALLING IT BY SOME OTHER NAME AND NOMENCLATURE DOES NOT CHANGE ITS REAL CHARACTER I. E. RENT. THEREFORE THE SUM SO PAID BY THE ASSESSEE IS RENT A ND THEREFORE SQUARELY REQUIRES APPLICATION OF SECT. 1941. AT TH IS JUNCTURE IT IS NECESSARY TO GO THROUGH THE EXPLANATION (I) TO SECT . 1941 WHICH PROVIDES DEFINITION OF WORD RENT FOR THE PURPOSE OF SECT. 1941. FOR SAKE OF CONVENIENCE AND PROPER UNDERSTANDING TH E RELEVANT PART OF EXPLANATION (I) TO SECT. 1941 IS REPRODUCED HEREUNDER:- (I) RENT MEANS ANY PAYMENT, BY WHATEVER NAME CAL LED, UNDER ANY LEASE, SUB-LEASE, TENANCY OR ANY OTHER AGREEMEN T OR ARRANGEMENT FOR THE USE OF (EITHER SEPARATELY OR TO GETHER) ANY (A) LAND; OR (B) TO (H) ----- WHETHER OR NOT ANY OR ALL OF THE ABOVE ARE OWNED BY THE PAYEE THE ASSESSEE CONVENIENTLY IGNORED TO READ THE CRUX OF THE DEFINITION OF RENT PROVIDED IN EXPLANATION (I) TO S ECTION 194-I OF THE INCOME TAX ACT, 1961. THE DEFINITION HAS CLEARLY ME NTIONED THAT THE PAYMENT MADE BY WHATEVER NAME CALLED AND FOR THE USE OF GETS COVERED BY THE PROVISIONS OF SECTION 194-1 OF THE INCOME TAX ACT, 1961. AS A RESULT, BY CALLING LEASE RENT AS LE ASE PREMIUM, DOES NOT CHANGE ITS REAL CHARACTER. THE NOMENCLATUR E USED IN RESPECT OF SUCH LEASE PREMIUM PAYMENT IS NOT DECISI VE. HERE IT IS NECESSARY TO MENTION THAT THE LEGISLATURE HAS TAKEN DUE CARE OF SUCH SITUATIONS ARISING BY USAGE OF DIFFERENT TERMI NOLOGY BY PROVIDING A COMPREHENSIVE DEFINITION OF RENT IN THE SECTION ITSELF. IN THE LIGHT OF THE FACTS OF THE CASE, STATUTORY PR OVISIONS OF SECT. 1941 ESPECIALLY DEFINITION OF RENT PROVIDED IN EXPL ANATION THERETO AND THE CASE LAWS CITED ABOVE THE UNDERSIGNED HAS NO SLIGHTEST HESITATION IN ARRIVING AT THE CONCLUSION THAT ASSES SEE WAS REQUIRED TO DEDUCT TAX U/S. 1941 AND PAY IT TO THE GOVT. TREASURY WITHIN THE STIPULATED TIME AS REQUIRED BY PROVISIONS OF CHAPTER XVI1 B OF THE INCOME TAX ACT. ADMITTEDLY AS SESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 1941 AN D THEREBY ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 6 CHAPTER XVII B OF THE INCOME TAX ACT BY DEDUCTING T HE TDS FROM THE LEASE RENT PAID TO THE C1DCO AND NOT PAID IT TO THE GOVERNMENT TREASURY. AS A RESULT ASSESSEE HAS COMMI TTED DEFAULT WITHIN THE MEANING OF SECTION 20 1(1) AND T HEREBY IT IS AN ASSESSEE IN DEFAULT. ACCORDINGLY, ASSESSEE IS TRE ATED AS ASSESSEE IN DEFAULT AND DIRECTED TO MAKE PAYMENT OF INTEREST U/S. 201(1A). 4. 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 CIDCO NOT BEING IN THE NATURE OF ADVANCE RENT WITHIN THE MEANING OF SECTION 194-1 OF THE ACT, THE ASSESSEE WAS 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 MADE ON BEHALF OF THE ASSESSEE BEFORE HIM WERE FORWARDED BY THE LD. CIT(A) TO THE A.O. FOR HIS COM MENTS. IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(A), THE A.O. OFFERE D HIS COMMENTS ON THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE. AFTER C ONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AND THE COMMENTS OFFERED BY THE A.O. ON THE SAID SUBMISSIONS IN THE REMAND R EPORT AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) FOUND THAT A SIMILAR ISSUE INVOLVING IDENTICAL FACTS AND CIRCUMSTANCES WAS CON SIDERED AND DECIDED BY HIM IN DETAIL VIDE HIS ORDER PASSED IN T HE CASE OF NAVI MUMBAI SEZ PVT. LTD. ACCORDINGLY, FOLLOWING THE DEC ISION IN THE CASE OF NAVI MUMBAI SEZ PVT. LTD. ON A SIMILAR ISSUE INVOLV ING IDENTICAL FACTS, THE LD. CIT(A) HELD THAT THE PREMIUM PAID BY THE AS SESSEE IN RESPECT OF LEASED PLOT OF LAND TO CIDCO DURING THE YEAR UNDER CONSIDERATION WAS NOT IN THE NATURE OF RENT AS CONTEMPLATED U/S 194-I OF THE ACT AND THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE F ROM THE PAYMENT OF PREMIUM MADE TO CIDCO. THE DEMAND RAISED AGAINST TH E ASSESSEE BY TREATING IT AS ASSESSEE IN DEFAULT VIDE AN ORDER PA SSED BY THE A.O. U/S 201(1) & 201(1A) OF THE ACT FOR THE YEAR UNDER CONS IDERATION, THEREFORE, WAS CANCELLED BY THE LD. CIT(A). AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS PREFERRED THIS APPEAL BEFOR E THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT A SIMILAR ISSUE INVOLVED IN THE CASE OF SHREE NAMAN H OTELS PVT. LTD. HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSESSEE VIDE A N ORDER OF EVEN DATE PASSED IN ITA NO. 688 TO 691/MUM/2012 BY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL PASSED IN THE CA SE 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 & ASSOCIATES REALTORS PVT. LTD. (SUPRA), A SIMILAR ISSUE WAS DEC IDED BY THE TRIBUNAL 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 BROUGHT ON RECORD IN THE FORM OF PAPER BOO K AND ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 7 THE JUDICIAL DECISIONS RELIED UPON BY THE RIVAL PAR TIES. THE ENTIRE GRIEVANCE REVOLVES AROUND THE PREMIUM PAID B Y THE ASSESSEE TO M/S. MMRDA LTD. FOR THE LEASEHOLD RIGHT S 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 SO URCE FAILING WHICH THE ASSESSEE IS TO BE TREATED AS ASSE SSEE IN DEFAULT. IT IS THE SAY OF THE ASSESSEE THAT SUCH L EASE PREMIUM IS IN THE NATURE OF CAPITAL EXPENDITURE AND THEREFORE THERE IS NO QUESTION OF DEDUCTION OF TAX AT SOURCE. FURTHER, THE SAID LEASE PREMIUM DOES NOT C OME WITHIN THE PURVIEW OF THE DEFINITION OF RENT AS PRO VIDED U/S. 194-1 OF THE ACT. 10. WE HAVE CAREFULLY PERUSED THE LEASE DEED AS EXHIBITED FROM PAGE-1 TO 42 OF THE PAPER BOOK. A C AREFUL READING OF THE SAID LEASE DEED TRANSPIRES THAT THE PREMIUM IS NOT PAID UNDER A LEASE BUT IS PAID AS A PRICE FOR OBTAINING THE LEASE, HENCE IT PRECEDES THE GRAN T OF LEASE. THEREFORE, BY ANY STRETCH OF IMAGINATION, I T CANNOT BE EQUATED WITH THE RENT WHICH IS PAID PERIODICALLY . A PERUSAL OF THE RECORDS FURTHER SHOW THAT THE PAYMEN T TO MMRD IS ALSO FOR ADDITIONAL BUILT UP ARE AND ALSO F OR GRANTING FREE OF FSI AREA, SUCH PAYMENT CANNOT BE EQUATED TO RENT. IT IS ALSO SEEN THAT THE MMRD IN EXERCISE OF POWER U/S. 43 R.W. SEC. 37(1) OF THE MAHARASHT RA TOWN PLANNING ACT 1966, MRTP ACT AND OTHER POWERS ENABLING THE SAME HAS APPROVED THE PROPOSAL TO MODI FY REGULATION 4A(II) AND THEREBY INCREASED THE FSI OF THE ENTIRE G BLOCK OF BKC. THE DEVELOPMENT CONTROL REGULATIONS FOR BKC SPECIFY THE PERMISSIBLE FSI. PURSUANT TO SUCH PROVISIONS, THE ASSESSEE BECAME EN TITLED FOR ADDITIONAL FSI AND HAS FURTHER ACQUIRED/PURCHAS ED THE ADDITIONAL BUILT UP AREA FOR CONSTRUCTION OF AD DITIONAL AREA ON THE AFORESAID PLOT. THUS THE ASSESSEE HAS MADE PAYMENT TO MMRD UNDER DEVELOPMENT CONTROL FOR ACQUIRING LEASEHOLD LAND AND ADDITIONAL BUILT UP AR EA. THE DECISIONS OF THE TRIBUNAL IN THE CASE OF M/S. N ATIONAL STOCK EXCHANGE (SUPRA) AND MUKUND LTD (SUPRA) HAVE BEEN WELL DISCUSSED BY THE LD. CIT(A) IS HIS ORDER. THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF KHIMLINE PUMPS LTD. (SUPRA) SQUARELY AND DIRECTLY APPLY ON THE FACTS OF THE CASE WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT PAYMENT FOR ACQUIRING LEASEHOLD LAND IS A CAPITAL EXPENDITURE. CONSIDERING THE ENTIRE FACTS IN TOTALITY IN THE LIG HT OF THE JUDICIAL DECISIONS VIS--VIS PROVISIONS OF SEC. 194 -1, DEFINITION OF RENT AS PROVIDED UNDER THE SAID PROVI SION, WE DO NOT FIND ANY REASON TO TAMPER OR INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) WHICH WE CONFIRM. ./ I.T.A. NO.6193/MUM/2012 ( / ASSESSMENT YEAR : 2010-11 8 6. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF W ADHWA & ASSOCIATES REALTORS PVT. LTD. (SUPRA) AS WELL AS SHREE NAMAN HOTELS PVT . LTD. (SUPRA) DECIDED BY THE TRIBUNAL, WE RESPECTFULLY FOLLOW THE DECISIONS RENDERED IN THE SAID CASES BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND UPHOL D THE IMPUGNED ORDER OF THE LD. CIT(A) HOLDING THAT THE LEASE PREMIUM PAID BY THE ASSESSEE TO CIDCO NOT BEING IN THE NATURE OF RENT AS CONTEMPLATED IN SECTION 194-I OF THE ACT, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FRO M THE SAID PAYMENT AND HENCE COULD NOT BE TREATED AS THE ASSESSEE IN DEFAU LT U/S 201(1) & 201(1A) OF THE ACT. THE APPEAL FILED BY THE REVENUE IS ACCORD INGLY DISMISSED. 4.1 IN VIEW OF ABOVE DISCUSSION, FOLLOWING THE AFOR EMENTIONED DECISION, WE DECLINE TO INTERFERE IN THE RELIEF GRANTED BY LD. C IT(A)AND REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/05/2015 ' * +, 13/05/2015 ' SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; + DATED 13/05/2015 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /# ( ) / THE CIT(A)- 4. /# / CIT 5. 01 #23 , $ 23 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, 0# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . .VM , SR. PS