Lease Premium Paid to CIDCO is a Capital Expenditure, Thus Not Liable to TDS

Revenue raised an appeal against the order of CIT (A) deleting the addition of Rs.35,85,083/- made by the assessing officer.

Brief of the case 6 to 8 lines

In the Case of Income Tax Officer (TDS) Vs. M/s Progressive Civil Engineers Private Limited,  ITAT Mumbai held that Lease Premium payment made to CIDCO is to acquire capital asset being long term holding rights along with right to construct and therefore it is capital expenditure in nature. Thus, same cannot be treated as rent under the preview of Section 194I of the Income Tax Act, 1961.
Facts of the case

a. CIDCO (M/s City Industrial Development Corporation) allotted a plot No. 166 in sector 27 of Belapuron on 5.5.2009 under the provision or rules prevailing in the state for a period of 60 years. During the assessment year 2010-11, company paid a sum of Rs. 1,38,12,158/- to CIDCO as Lease Premium.

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