|QUERY:||BIDCO which is a State Industrial Development Corporation grants a 99 year lease and collects a lump sum premium for granting the lease amounting to Rs. 40 crores. Yearly rent is Rs. 1,000/- . Whether section 194-I is applicable on the lump sum amount?|
|ANSWER:||Click here to read the full answer of the expert|
|EXPERT:||CA. H. N. Motiwalla|
|CATCH WORDS:||Deduction at source – Rent -Lease premium for grant of lease|
In ITO (TDS) v. Navi Mumbai SEZ (P) Ltd. [38 Taxmann.com 218] the Mumbai Tribunal has taken a view that lease premium paid by the assessee to BIDCO for acquiring leasehold land for a period of 60 years in order to develop a SEZ amounted to capital expenditure which did not fall within meaning of rent under section 194-I of the Act.