Search Results For: Deduction at source – Rent -Lease premium for grant of lease


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?
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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.