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1 - 5 of 5 (0.19 seconds)Commissioner Of Income-Tax, Assam Etc vs The Panbari Tea Co. Ltd on 19 April, 1965
10.1 A lease is a transaction, which has to be
supported by consideration. The consideration
may be either premium or rent or both. The
consideration which is paid periodically is called
rent. As regards premium, the Apex Court in the
case of Commissioner of Income Tax, Assam and
Manipur v. Panbari Tea Co. Ltd. reported in (1965)
3 SCR 811 has made a distinction between
premium and rent observing that when the
Page 14 of 17
C/Misc/Application No.75670 of 2024 In
Appeal No.: C/76203/2016-DB
interest of the lessor is parted with for a price, the
price paid is premium or salami, but the periodical
payments for continuous enjoyment are in the
nature of rent, the former is a Capital Income and
the latter is the revenue receipt. Thus, the
premium is the price paid for obtaining the lease
of an immovable property. While rent, on the
other hand, is the payment made for use and
occupation of the immovable property leased.
Section 78 in Finance Act, 1999 [Entire Act]
Section 105 in The Transfer Of Property Act, 1882 [Entire Act]
A.R. Krishnamurthy And A.R. ... vs Commissioner Of Income-Tax, Madras on 2 December, 1980
6.5. We observe that the one time Premium
received by the Appellant cannot be equated with
rent payable on regular intervals for continuous use
of the property. The difference between the
Premium or Salami and the lease rent as envisaged
in Section 105 of the Transfer of Property Act, 1882,
has been dealt in the decision of the Hon'ble High
Court in the case of A.R. Krishnamurthy and
A.R. Rajagopalan v. Commissioner of Income
Tax, Madras, (1982) 133 ITR 922 (Mad.). From
the decision cited above, we observe that the price
paid for transfer of possession or the right to enjoy
the property is called the 'Premium or Salami' and
the periodical payments made for continuous use of
the property under lease is called 'rent'. The
Applicant has received only a one-time payment as
Premium and hence by relying on the above
decision it becomes clear that the Premium received
by the Appellant cannot be called as 'rent'.
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