2015 (11) TMI 999 - HC - Income Tax

Transfer of development rights - receipt of advance - whether could be treated as sale consideration in the circumstances of the case? - Held that - In the instant case, since no sale occurred, no income can be said to have accrued to the assessee.The assessee s submission that sale is deemed to have taken place when proper conveyance is executed, in the circumstances is sound. In the absence of any sale, the revenue s attempt to bring to tax the advances received by the assessee must also fail, given that such advances were not towards any income that the assessee was entitled to receive in the two assessment years. See CIT(a) v/s DLF Commercial Project Corporation 2015 (7) TMI 576 - DELHI HIGH COURT - Decided against revenue. Non-deduction of TDS on the payments made on reimbursement of service charges - Disalllowance u/s 40(a)(ia) - Held that - In the instant case, it is undisputed that M/s DLF Land Ltd. had deducted TDS on the payments made by it under various heads on behalf of the assessee. Further, it is also not disputed that the assessee deducted TDS on the service charge paid by it to M/s DLF Land Ltd. on the reimbursement expenses. In such circumstances, this Court holds that the entire amount paid by the assessee to M/s DLF Land Ltd. is entitled to deduction as expenditure. Neither provision obliges the person making the payment to deduct anything from contractual payments such as those made for reimbursement of expenses, other than what is defined as income . The law thus obliges only amounts which fulfil the character of income to be subject to TDS in such cases; for other payments towards expenses, the deduction to those entitled (to be made by the payeee) the obligation to carry out TDS is upon the recipient or payee of the amounts. See Commissioner of Income Tax-III v. Gujarat Narmada Valley Fertilizers Co. Ltd. (2014 (4) TMI 235 - GUJARAT HIGH COURT )- See CIT(a) v/s DLF Commercial Project Corporation 2015 (7) TMI 576 - DELHI HIGH COURT - Decided against revenue.

Summary

The Delhi High Court dismissed the appeals for the Assessment Years 2007-08 and 2008-09 as questions identical to those raised by the Revenue had already been answered in favor of the Assessee in a previous judgment.