COMMISSIONER OF INCOME TAX Vs. REEBOK INDIA COMPANY
LAWS(DLH)-2007-3-63
HIGH COURT OF DELHI
Decided on March 12,2007

COMMISSIONER OF INCOME TAX Appellant
VERSUS
REEBOK INDIA COMPANY Respondents

JUDGEMENT

V.B.GUPTA, J. - (1.) Present appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as Act) against the order dated 2nd September, 2005 passed by the Income Tax Appellate Tribunal, Delhi in ITA(TDS) No.5/Del/2002 for the assessment year 1994-95.
(2.) The following substantial question of law has been framed by us for consideration:- "Whether the Income Tax Appellate Tribunal was correct in law in holding that the amount of Rs.1,50,24,000/-(termed as security deposit) paid by the Assessee to its landlord under the Agreement to Lease dated 10th March, 1995 was not 'rent' as defined in the Explanation to Section 194-I of the Income Tax Act, 1961."
(3.) The brief facts of this case are that the Assessee-company entered into an agreement with M/s ABCO Footwear Care to take on lease the premises bearing No.328/1, Village Bijwasan, New Delhi at a monthly rent of Rs.6,26,000/-. The lease agreement also provided for payment of security deposit amounting to Rs.1,50,24,000/- which was to be reduced every six months by an amount of rent which became payable in accordance with the agreement. The Assessee deducted tax at source under Section 194-I of the Act, on the actual payment of rent made by it.;


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