Jt. C.I.T. Vs. Mukund Ltd. 02/15/2007 [2007] 291 ITR 249 (MUMBAI)[SB] Case Fact: Whether Non-refundable `Premium` paid for obtaining land on lease of 99 years at the annual rent of Re. 1 for factory use in industrial area to State Development Corporation is advance rent? Decision: Held by the Hon`ble Bench that as the lease was for 99 years it is as good as perpetual lease ,thus the payment of premium is of enduring nature and nothing was refundable in the event of the company not being able to build the factory. Hence the payment of `Premium` is a Capital Expenditure.
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CA.Saibaburao Nanduri
Published in Income Tax