2020 (5) TMI 410

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..... initively its income and rent paid back to the Government is its expenses. It is a lease in lease out agreement/understanding. On the rent paid to the assessee by the tenants, tax is deductible under Section 194I. As assessee pays the same to the Government, it does not need to deduct tax at source on its repayment to the Government. In all practical purposes rent collected by the assessee from its tenants and rent paid to the Government (actual transfer of rent to the Government) is its outgo. Tax deducted by the Tenant should be granted as refund to the assessee as rent collected is its income in hands of the assessee and rent paid to the Government is its expenses. AO as well as the CIT(A) was not right in denying the credit of TDS .....

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..... ; 8,29,540/-. However, during the course of assessment proceedings, the assessee submitted computation of income wherein income has been declared at NIL after claiming benefit of exemption u/s 11 12 of the Income Tax Act. The Assessing Officer observed that the assessee is neither in the field of education nor in the field of medical relief or relief of poor, preserve of environment (including water sheds, forests and wild lives) and preservation of monuments or places or objects of artistic or historic interest. The Assessing Officer held that the entire receipts of sales are arising out of commercial transactions and thus made addition of ₹ 46,48,967/- towards the deduction of admissible expenses. 4. Being aggrieved by the asse .....

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..... uilding is owned by the Government of India. The assessee is not the beneficial owner of the rent as property was given by the Government to the assessee for its use. The assessee was merely collecting the rent. Thus, the rent collected by the assessee is definitively its income and rent paid back to the Government is its expenses. It is a lease in lease out agreement/understanding. Therefore, on the rent paid to the assessee by the tenants, tax is deductible under Section 194I of the Income Tax Act, 1961. As assessee pays the same to the Government, it does not need to deduct tax at source on its repayment to the Government. Thus, in all practical purposes rent collected by the assessee from its tenants and rent paid to the Government (a .....

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