DCIT (TDS)-3(2), Mumbai v. M/s The Tata Power Co. Ltd
[Citation -2016-LL-1018-77]

Citation 2016-LL-1018-77
Appellant Name DCIT (TDS)-3(2), Mumbai
Respondent Name M/s The Tata Power Co. Ltd.
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 18/10/2016
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags deduct tax at source • transfer of property • payment of interest • capital expenditure • payment of premium • deduction of tax • leasehold rights • capital receipt • leasehold land • capital nature • lease rent
Bot Summary: The relevant facts of the case giving rise to these appeals are that the assessees were allotted certain plots of land in the Bandra Kurla Complex on lease subject to payment of lease premium to MMRDA. In addition to such lease premium, the 6 ITA No.3936/Mum/2013 780/Mum/2015 The Tata Power Co. Ltd. assessee made further payment of premium to MMRDA towards additional basement area and areas towards lifts, staircase lift lobbies etc. Claimed free of FSI. This plea of the assessee is devoid of any merits from very fact that this additional payment of lease premium is extension of additional lease liability arisen out of original lease agreement entered between M/s. MMRDA and M/s. Naman Developers Ltd. The assessee is required to make a payment due to the fact that he being provided additional usage and amenity by the MMRDA in addition to what specified in the Original Lease Agreement. Claimed free of FSI has been given by the MMRDA to the Naman BKC Properties Pvt. Ltd. a Joint Venture promoted by M/s. Naman Developers Ltd. on Lease vide Lease Agreement for which lump sum Lease premium was charged. Ii) The lease premium has been paid for getting possession of the lease property before the lease agreement is entered into. The Hon bel ITAT followed Mukund Ltd. s case and clearly held that such payment of lease premium constitutes a capital 12 ITA No.3936/Mum/2013 780/Mum/2015 The Tata Power Co. Ltd. expenditure for acquiring lease hold right and not an advance rent for a lease period. CIT(A) to the decision in the case of Raja Bahadur Kamakshya Narain Singh of Ramgarh v. Commissioner of Income-tax, 11 ITR 513 wherein it was held that the payment of salami under the lease agreement was a capital receipt being a single payment made for the acquisition of the right by the lessee to enjoy the benefits granted to them under the lease. A careful 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 grant of lease.


IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI Before Shri Joginder Singh, Judicial Member, and Shri Manoj Kumar Aggarwal, Accountant Member ITA NO.3936/Mum/2013 Assessment Year: 2009-10 DCIT(TDS)-3(2), M/s Tata Power Co. Ltd. 1012, 10th Floor, Smt. K.G. Reliance Energy Centre, Mittal Ayurvedic Hospital Santacruz (E), Building, Charni Road (W), Vs. Mumbai-400055 Mumbai-400002 (Revenue) (Assessee) PAN. No.AAACT0054A ITA NO.780/Mum/2015 Assessment Year: 2002-03 DCIT-2(3)(1), M/s Tata Power Co. Ltd. R. No.552, 5th Floor, Corporate Center, Block- B Aayakar Bhavan, 5th Floor, 34, Sant Tukaram M.K. Road, Vs. Road, Carnac Bunder, Mumbai-400020 Mumbai-400001 ( Revenue) (Assessee) PAN. No.AAACT4060A 2 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. Assessee by Shri Dinesh Vyas Revenue by Shri B.Pruseth CIT-DR and Shri J.Saravanan Date of Hearing : 13/10/2016 Date of Order: 18/10/2016 O R D E R Per Joginder Singh (Judicial Member) assessee is aggrieved by impugned orders dated 20/02/2013 for Assessment year 2009-10 and dated 10/10/2014 for Assessment year 2002-03 of ld. First Appellate Authority, Mumbai, on ground in deleting disallowance by Ld. Commissioner of Income Tax (Appeal) made u/s 14A of Income Tax Act, 1961 (hereinafter Act) at rate of 4% of exempt income while accepting fact that assessee must have incurred some expenses to earn exempt income of Rs.37.05 crores and further restricting disallowance to Rs.20,31,965/- (Assessment year 2002-03). 2. During hearing, ld. counsel for assessee, at outset, ld. counsel for assessee claimed that impugned issue is covered by decision in CIT vs State Bank of India, financial reporting, compliance and taxation department 375 ITR 20 (Bom.), DIT vs Credit Agricole Indosuez (377 ITR 102) (Bom.) and CIT vs J. K. Charitable Trust (175 taxman 251)(SC). This factual matrix was not controverted by ld. DR. 3 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. 2.1. We have considered rival submissions and perused material available on record. It is noted that assessee claimed exempt income of Rs.37,05,31,621/- (interest Rs.52,71,575/-and dividend of Rs.36,52,60,046/-). ld. Assessing Officer vide order dated 24/02/2005 framed u/s 143(3) of Act made ad-hoc disallowance at rate of 5% of exempt income amounting to Rs.1,85,26,581/- u/s 14A of Act. On appeal, before Ld. Commissioner of Income Tax (Appeal) vide order dated 24/02/2009, Assessing Officer was directed to workout disallowances under Rule-8D. On appeal before Tribunal, vide order dated 20/04/2012 (ITA No.3035 & 3039/Mum/2009), matter was remanded back to file of Assessing Officer relying upon directions contained in Assessment year 2001-02, by relying upon decision from Hon'ble jurisdictional High Court in case of Godrej & Boyce Mfg. Co. Ltd. vs DCIT 328 ITR 81 (Bom.). In compliance of direction Assessing Officer vide effect order dated 26/11/2013 made ad-hoc disallowance at rate of 4% of exempt income amounting to Rs.1,48,21,265/- u/s 14A of Act. stand of assessee was that disallowance should be computed on proportionate basis. Ld. Commissioner of Income Tax (Appeal) vide order dated 10/10/2014 restricted disallowance u/s 14A to extent of Rs.20,31,965/-, which was calculated on proportionate basis of exempt income to total income on basis as per Assessment year 2001-02. It is noted that 4 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. for Assessment year 2001-02, ld. Assessing Officer made ad-hoc disallowance of 5% of exempt income and finally matter was remanded back to Assessing Officer with direction to follow decision from Hon'ble jurisdictional High Court in Godrej & Boyce (supra). Assessing Officer while giving effect to order of Tribunal dated 09/01/2013 followed order of Ld. Commissioner of Income Tax (Appeal) and maintained disallowance on proportionate basis. facts of present appeal is similar to Assessment year 2001-02 as is evident from finding of Tribunal in order for Assessment year 2002-03 (ITA No.3035 & 3079/Mum/2009) order dated 20/04/2012. No appeal was preferred by Revenue nor any contrary decision was brought to our notice. Thus, Department is expected to follow judicial precedence as was held in CIT vs J.K. Charitable Trust (175 taxman 251)(SC) and DIT vs Credit Agricole Indosuez (377 ITR 102)(Bom.). We find no infirmity in conclusion of Ld. Commissioner of Income Tax (Appeal), thus, appeal of Revenue is dismissed. 3. Now, we shall take up appeal of Revenue for Assessment year 2009-10 (ITA No.3936/Mum/2013). ld. counsel for assessee claimed that this issue is covered by decision of Tribunal in case of Income Tax Officer (TDS) vs Wadhwa & Associates Realtors (P.) Ltd. (ITA No.695/Mum/2012) order dated 03/07/2013, Income Tax Officer vs Naman BKC CHS Ltd. (ITA No.708 & 5 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. 709/Mum/2012) order dated 12/09/2013, Income Tax Officer vs Shree Naman Developers Ltd. (ITA No.686 & 687/Mum/2012), Income Tax Officer vs Mumbai Pune Motor Malak Shramjivan Premises Co-op. Society Ltd. (ITA No.3889/Mum/2014) order dated 04/12/2015. This factual matrix was not controverted by ld. DR. 3.1. We have considered rival submissions and perused material available on record. In view of above, we are reproducing hereunder one of aforesaid order i.e. Income Tax Officer vs Shree Naman Developers Ltd. (ITA No.686 & 697/Mum/2012) order dated 14/08/2013 for ready reference:- These six appeals preferred by Revenue against two separate orders passed by ld. CIT(A) -14, Mumbai dated 21- 11-2011 in case of two assessees involve common issue and same therefore have been heard together and are being disposed of along with cross objections filed by assessees by this single consolidated order for sake of convenience. 2. Although Revenue has raised as many as 12 identical grounds in all six appeals, solitary issue arising out of same is whether assessee is required to deduct tax at source from payment of lease premium made to MMRDA during years under consideration u/s 194-1 of Income Tax Act, 1961 (the Act). 3. relevant facts of case giving rise to these appeals are that assessees were allotted certain plots of land in Bandra Kurla Complex on lease subject to payment of lease premium to MMRDA. In addition to such lease premium, 6 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. assessee made further payment of premium to MMRDA towards additional basement area and areas towards lifts, staircase & lift lobbies etc. during years under consideration. According to A.O., assessees were required to deduct tax at source from payment of lease premium made to MMRDA as per provisions of section 194-1 of Act and since no such tax was deducted by assessees from said payments, he issued notices to assessees requiring them to show cause as to why they should not be treated as assessees in default for their failure to deduct tax at source from payments of lease premium made to MMRDA assessees filed their reply to show cause notices issued by A.O. explaining their stand on issue and after considering and discussing same in detail, A.O. held that assessees were liable to deduct tax at source from payment made to MMRDA on account of lease premium and treated them as assessees in default for failure to do so for following reasons given in orders passed u/s 201(1) and 201(1A) of Act, which are identical in case of both assessees: At outset, it needs to be mentioned that Assessee has vehemently claimed that payment referred in show cause does riot bear character of Rent mentioned in Sect. 194 I and therefore there is no requirement of deduction of tax from such payment made to MMRDA. entire emphasis of assessee from getting away from clutches of Section 194 I is that payment has not been made for use of any land or building but payments relates to approval to permit areas counted towards stair-case, lift, lift lobbies, etc. claimed free of FSI. This plea of assessee is devoid of any merits from very fact that this additional payment of lease premium is extension of additional lease liability arisen out of original lease agreement entered between M/s. MMRDA and M/s. Naman Developers Ltd. assessee is required to make payment due to fact that he being provided additional usage and amenity by MMRDA in addition to what specified in Original Lease Agreement. This being extension of original agreement payment being made for granting of additional facilities such payment bears very character which was owned by original character i.e. Rent. Further, assessee s 7 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. pleas that payment of premium is not for use of any land does not hold any water from very fact that area used for stair- case, lifts, and lobbies should be allowed free of FSI whereby assessee has became entitled for usage of such FSI for his fruitful purpose in as much as on such additional FSI enabled assessee to construct additional structure. Thus in lieu of such additional entitlement assessee was required to make additional payment to MMRDA than fixed by original Lease Deed. Such payment being additional payment than what was fixed by MMRDA is lease payment and therefore assessee was required to adhered to provisions of Sect. 194 I. land under question in respect of which now assessee has got approval to permit areas counted towards stair-case, lift, lift lobbies, etc. claimed free of FSI has been given by MMRDA (Lessor) to Naman BKC Properties Pvt. Ltd. Joint Venture promoted by M/s. Naman Developers Ltd. on Lease vide Lease Agreement for which lump sum Lease premium was charged. This lump-sum payment made at time of original allotment of Plot on Lease by Leasee has been made to avoid recurring payment by installments to Lessor. payment so made is Rent for enjoyment and occupancy of impugned land. one time payment does not change character of this payment and therefore it squarely falls within parameter of section 1941. However TDS was not deductible on impugned premium paid at time of allotment of Plot of Land in respect of which now additional FSI is allotted was because MMRDA was possessing Certificate u/s. 197 authorizing payer (leasee) to make payment of lease premium without deduction of tax. However, this is not situation now. MMRDA is not having any such exemption certificate in possession hence premium paid now for additional FST i.e. approval of permit areas counted towards stair-case, lift, lift lobbies, etc. claimed free of FSI for additional usage and amenity deserves deduction of tax u/s. 1941 of I.T. Act. This inference also gathers support from judicial pronouncements of Hon ble Karnataka High Court in case of CIT v/s HMT Limited - 203 ITR 820 and that of Hon ble Calcutta High Court in this case of Braithwoite & Co. (I) Ltd. v/s CIT - 111 ITR 542. Both High Courts in these cases have ruled that lease premium paid in lump sum is nothing but rent paid in advance 8 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. to obviate periodical payments. Going by verdict of these Hon ble High Courts, rulings are squarely applicable to facts of instant case. Therefore, obligation was cast upon Assessee to deduct tax at source from lease premium paid to MMRDA as per provisions u/s 194-I of Income Tax Act, 1961. It is further necessary to mention that admittedly vide original Lease Agreement for usage of land and subsequent approval of MMRDA to permit areas counted towards stair-case, lift, lift lobbies, etc. claimed free of FSI, assessee has acquired right of occupancy and right of enjoyment of impugned plot, and payment made for availment of such right is Rent and Rent only and nothing else. By calling it by some other name and nomenclature does not change its real character i.e. Rent. Therefore sum so paid by assessee is Rent and therefore squarely requires application of Sect. 194 I. At this juncture it is necessary to go through explanation (i) to Sect. 194 I which provides defincation of word rent for purpose of sect. 194 I. For sake of convenience and proper understanding relevant part of explanation (i) to Sect. 194 I is reproduced hereunder: (i) rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement 91 use of (either separately or together) any (a) land; or (b) to (h) whether or not any or all of above are owned by payee Assessee conveniently ignored to read crux of definition of rent provided in explanation (i) to section 194-I of Income Tax Act,1961. definition has clearly mentioned that payment made by whatever name called and for use of gets covered by provisions of Section 194-I of Income Tax Act, 1961. As result, by calling lease rent as lease premium, does not change its real character. nomenclature used in respect of such lease premium payment is not decisive. Here it is necessary to mention that Legislature has taken due care of such situations arising by usage of different terminology by providing comprehensive definition of Rent in section itself In light of facts of case, statutory provisions of Sect. 194 I especially definition of Rent provided in explanation thereto 9 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. and case laws cited above undersigned has no slightest hesitation in arriving at conclusion that assessee was required to deduct tax u/s. 194 I and pay it to Govt. Treasury within stipulated time as required by provisions of chapter XVII B of Income Tax Act. Admittedly assessee has not complied with provisions of section 194 I and thereby chapter XVII B of Income Tax Act by deducting TDS from Lease Rent paid to MMRDA and not paid it to Government Treasury. As result it has committed default within meaning of section 201 (1) and thereby it is assessee in default. Accordingly, assessee is treated as assessee in default and directed to make payment of interest u/s. 201 (1 A) along-with TDS as worked out herein- under: XXXXXXXXXXXX 4. Against orders passed by A.O. u/s 201(1)/201(1A) of Act, both assessees filed their appeals before ld. CIT(A) and elaborate submissions were made on their behalf before ld. CIT(A) in support of stand that lease premium paid to MMRDA not being in nature of advance rent within meaning of section 194-1 of Act, these assessees were not liable to deduct tax at source and therefore they could not be treated as assessees in default u/s 201(1) & 201(1A) of Act. said submissions made on behalf of assessee before ld. CIT(A), as summarized by him in his impugned orders were as under:- payment made by Appellant (Lessee) to MMRDA Lesser is for acquiring right in lease premises and not advance rent for use of lease premises over period of 80 years. ii) lease premium has been paid for getting possession of lease property before lease agreement is entered into. iii) Appellant (Lessee) has right to own and transfer lease property for consideration subject to compliance of conditions stipulated in lease agreement. Clause 3 (p) of lease agreement clearly recognizes right to ownership of Lessee over lease property. 10 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. iv) lease property under agreement can be inherited or succeeded by legal heir or successor. v) clauses in lease agreement refer to payment made by Appellant (Lessee) as premium being consideration for acquiring lease hold property. None of clauses in lease agreement refers to premium paid by Appellant (Lessee) as advance rent. vi) Appellant(Lessee) will have no right to get any refund of premium paid for acquiring lease hold right on its surrender before expiry date. vii) various clauses of lease agreement which are referred by AO in its submission before your Honour as restrictive clauses, are in fact regulatory clauses incorporated in lease agreement for desired development of leased area in particular manner and particular purpose as regulatory authority (MMRDA) provide complete infrastructure and give effect to intention of government to develop area. viii) Karnataka High Court Judgement in case of HMT Ltd. has been decided by Hon ble court on finding of fact by ITAT that payment made by Lessee constitutes advance rent and hence same shall be allowed as deduction u/s 3 7(1) of I. T. Act. Moreover various decisions of Bombay High Court and ITAT have clearly distinguished HMT s case and its applicability to premium paid for acquiring lease hold right. Hon ble ITAT Mumbai Special Bench, in case of Mukund Ltd. has discussed in detail judgement of HMT Ltd. and held that premium paid for acquiring leasehold right does not constitute advance rent. Hon ble ITAT Mumbai, Speical Bench has followed jurisdictional High Court s view in case of Khimline Pumps Ltd. wherein jurisdictional high court has held that premium paid for acquiring lease hold right constitutes capital expenditure and not advance payment of rent for lease period. 11 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. ix) Section 194-1 of I. T. Act clearly provides that payment made by person should be in nature of income by way of rent . This expression expressly requires that receipt in hands of Lesser/owner must constitute income by way of rent in hands of recipient. x) definition of rent contained in explanation to section 1 94-I also clearly provides that payment made must be for use of land no where definition of rent ropes in consideration paid for acquiring leasehold right. Appellant(lessee) reiterates its contention that premium paid for acquiring leasehold right is not income by way of rent of recipient for use of land. xi) various judgments relied upon by Appellant (Lessee) in support of its contention clearly confirms view that premium paid for acquiring leasehold rights in land constitutes consideration of capital nature and not advance rent for use of land over lease period. On plain reading of lease agreement prevailing facts of case and taking wholistic view of facts and circumstances of case and position in law, such lease premium paid can not be considered to be rent within meaning of section 194-I. Appellant once again submits that its submission concerning lease premium paid is fully supported by various judicial pronouncements which are discussed in detail by Hon ble ITAT special bench, Mumbai in case of Mukund Ltd.. xii) Recently Hon ble ITAT, Mumbai had occasion to consider similar issue wherein lease premium paid by National StockExchange of India Ltd. to MMRDA for acquiring leasehold right in land at Bandra Kurla Complex was claimed to be deductible advance rent over lease period. Hon bel ITAT followed Mukund Ltd. s case and clearly held that such payment of lease premium constitutes capital 12 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. expenditure for acquiring lease hold right and not advance rent for lease period . 5. In light of submissions made by assessees as above as well as material available on record, ld. CIT(A) proceeded to examine issue involved in case of assessees. In this regard, he noted that lease premium charged by MMRDA to assessees was equal to prevailing market rate for acquisition of commercial premises as per valuation made for stamp duty purpose. He also noted that rates so prescribed by stamp duty authorities were for acquisition of property and not for use of let out property by tenant. He further noted that even additional premium was charged by MMRDA to assessee for additional FSI as per ready reckoner rate prescribed by stamp duty authorities. ld. CIT(A) held that whole transaction involving grant of leasehold rights by MMRDA to assessees thus was nothing but transaction of transfer of property and lease premium agreed to be paid was consideration for acquisition of such leasehold rights in property. In this regard, reference was made by ld. CIT(A) to decision in case of Raja Bahadur Kamakshya Narain Singh of Ramgarh v. Commissioner of Income-tax, (1943) 11 ITR 513 (PC) wherein it was held that payment of salami under lease agreement was capital receipt being single payment made for acquisition of right by lessee to enjoy benefits granted to them under lease. He also relied on decision of Hon ble Supreme Court in case of Member for Board of Agricultural Income tax vs. Sindhurani Chaudhrani & Ors, 32 ITR 169 (SC) wherein it was held that salami as lumpsum non-recurring payment made by prospective tenant to landlord which is not in nature of rent within definition of agricultural income given in Income Tax Act. It was held that suchpayment has all characteristics of capital payment and it is not revenue in nature. ld. CIT(A) further relied on decision of Hon ble Bombay High Court in case of Commissioner of Income-tax v. Khimline Pumps Ltd. (2002) 258 ITR 459 wherein it was held that amount of Rs. 45 lacs paid by assessee to M/s APVE Ltd. for acquisition of leasehold land was 13 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. capital expenditure. ld. CIT(A) also referred to decision of Special Bench of ITAT in case of Mukund Ltd., 106 ITR 231 wherein it was held that premium paid for acquiring leasehold right in land was capital expenditure. ld. CIT(A) then discussed case laws relied upon by A.O. in his orders and recorded finding after such discussion that in none of said case laws, it was held that lease premium paid in similar circumstances was in nature of advance rent and tax was deductible at source u/s 194-I of Act. He held that case laws relied upon by A.O., therefore, were distinguishable on facts and in law and same were not applicable to facts of assessees case. ld. CIT(A) finally referred to decision of Tribunal in case of National Stock Exchange of India Limited (ITA No. 1955/Mum/99 and others) and noted that in similar facts and circumstances involved in that case, it was held by Tribunal that consideration paid for acquiring leasehold rights in land was capital expenditure and not rent. Accordingly, ld. CIT(A) held that payment made by assessees to MMRDA on account of lease premium for acquiring leasehold rights and additional FSI in respect of lease property was not in nature of rent as contemplated in section 194-I of Act and assessees were not required to deduct tax at source from said payment. Accordingly, demand raised by A.O. treating assessees in default u/s 201(1) & 201(1A) was cancelled by ld. CIT(A). Aggrieved by orders of ld. CIT(A), Revenue has preferred these appeals before Tribunal. 6. We have heard arguments of both sides and also perused relevant material available on record. ld. representatives of both sides have agreed that common issue involved in these six appeals of Revenue is squarely covered in favour of assessee by decision of Tribunal rendered in case of M/s Wadhwa & Associates Realtors Pvt. Ltd. vide order dated 3-7-2013 passed in ITA No. 695/Mum/2012 wherein similar issue has been decided by Tribunal in favour of assessee for following reasons given in para 9 & 10 of its order:- 14 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. 9. We have considered rival submissions, perused order of lower authorities and material evidence brought on record in form of paper Book and judicial decisions relied upon by rival parties. entire grievance revolves around premium paid by assessee to M/s. MMRDA Ltd. for leasehold rights acquired by assessee through lease deed dt. 22nd November, 2004. It is say of Revenue that this lease premium was liable for deduction of tax at source failing which assessee is to be treated as assessee in default. It is say of assessee that such lease premium is in nature of capital expenditure and therefore there is no question of deduction of tax at source. Further, said lease premium does not come within purview of definition of rent as provided u/s. 194-1 of Act. 10. We have carefully perused lease deed as exhibited from page- 1 to 42 of Paper Book. careful reading of said lease deed transpires that premium is not paid under lease but is paid as price for obtaining lease, hence it precedes grant of lease. Therefore, by any stretch of imagination, it cannot be equated with rent which is paid periodically. perusal of records further show that 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. It is also seen that MMRD in exercise of power u/s. 43 r.w. Sec. 37(1) of Maharashtra Town Planning Act 1966, MRTP Act and other powers enabling same has approved proposal to modify regulation 4A(ii) and thereby increased FSI of entire G Block of BKC. Development Control Regulations for BKC specify permissible FSI. Pursuant to such provisions, assessee became entitled for additional FSI and has further acquired/purchased additional built up area for construction of additional area on aforesaid plot. Thus assessee has made payment to MMRD under Development Control for acquiring leasehold land and additional built up area. decisions of Tribunal in case of M/s. National Stock Exchange (supra) and Mukund Ltd (supra) have been well discussed by Ld. CIT(A) is his order. decision of Hon ble Jurisdictional High Court in case of Khimline Pumps Ltd. (supra) squarely and directly apply on facts of case wherein Hon ble Jurisdictional High Court has held that payment for acquiring leasehold land is capital expenditure. Considering entire facts in totality in light of judicial decisions vis- -vis provisions of Sec. 194-1, definition of rent as provided under said provision, we do not find any reason to tamper or interfere with findings of Ld. CIT(A) which we confirm . 7. As issue involved in present cases as well as all material facts relevant thereto are similar to case of Wadhwa & Associates Realtors Pvt. Ltd. (supra) decided by Tribunal, we respectfully follow said decision of co-ordinate Bench of this 15 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. Tribunal and uphold impugned orders of ld. CIT(A) holding that lease premium paid by assessees to MMRDA not being in nature of rent as contemplated in section 194-I of Act, they were not liable to deduct tax at source from said payment and hence could not be treated as assessees in default u/s 201(1) & 201(1A) of Act. appeals filed by Revenue are accordingly dismissed. 3.2. Following aforesaid decision of Tribunal and considering various decisions, wherein various case laws have been considered, relied upon by assessee, we find no infirmity in order of Ld. Commissioner of Income Tax (Appeal) by holding that lease premium paid by assessee to MMRDA, not being nature of rent as contemplated in section 194-I of Act, thus, not liable to deduct tax at source from said payment, therefore, assessee cannot be treated as assessee in default u/s 201(1) and 201(1A) of Act, resultantly, appeal of Revenue is dismissed. Finally, both appeals of Revenue are dismissed. This Order was pronounced in open court in presence of ld. representatives from both sides at conclusion of hearing on 13/10/2016. Sd/- Sd/- (Manoj Kumar Aggarwal) (Joginder Singh) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 18/10/2016 P.S/. . 16 ITA No.3936/Mum/2013 & 780/Mum/2015 Tata Power Co. Ltd. Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT, Mumbai. 4. CIT(A)- Mumbai 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai DCIT (TDS)-3(2), Mumbai v. M/s Tata Power Co. Ltd
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