CIT (TDS)-1 Vs Mahagun (India) Pvt. Ltd. (Delhi High Court)
In CIT (TDS)-1 Vs Mahagun (India) Pvt. Ltd., the Delhi High Court dismissed Revenue’s appeals and reaffirmed that annual lease rent paid to Greater Noida Development Authority attracts TDS under Section 194I of the Income-tax Act. The Tribunal had allowed the assessee’s appeal by relying on the earlier High Court ruling in Rajesh Projects (India) Pvt Ltd v. CIT (TDS)-II, which held that lease rent paid for use of land constitutes “rent” within the meaning of Section 194I and is therefore subject to TDS, though the ruling operated prospectively. This position was affirmed by the Supreme Court in New Okhla Industrial Development Authority v. CIT. Since the Revenue could not distinguish the facts from the binding precedent, the Court rejected the appeals, maintaining that TDS under Section 194I applies to such annual lease payments, in line with the settled legal position.
Core Issue: Whether annual lease rent paid to Greater Noida Development Authority (GNIDA) attracts TDS under Section 194I, and the scope of the term “rent” under the Income-tax Act.
Background of the Case: The assessee paid annual lease rent to Greater Noida Development Authority.
The Revenue held that TDS under Section 194I was deductible.
The ITAT allowed the assessee’s appeal, relying on an earlier Delhi High Court judgment.
The Revenue filed an appeal before the Delhi High Court.
Binding Precedents Applied
