9911796707
TMI Blog2022 (4) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... ve accommodation cannot be treated as rent. Such compensation cannot be treated as rent for the simple reason that not only the assessee is not using any land and building but it may also be a fact that persons to whom such payments have been made may not be incurring any expenditure on account of rent. In any case of the matter, payments made by assessee under no circumstances can be construed to be coming within the meaning of Rent as provided under section 194I. Thus, we are of the considered opinion that compensation paid by the assessee to the tenants towards alternative accommodation not being in the nature of rent as defined in section 194I, there is no requirement for deduction of tax under the said provisions. Therefore, the disallowance made u/s 40(a)(ia) of the Act cannot be sustained. Consequently, we delete the addition made on that account. Grounds raised by the assessee are allowed. - I.T.A. No. 1730/Mum/2021 - - - Dated:- 25-4-2022 - Shri Shamim Yahya (AM) Assessee by: Shri Ravi Dasija Department by: Shri Pravin Salunkhe ORDER This appeal by the assessee is directed against the order of learned CIT(A) dated 2.9.2021 pertains to A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, Rs. 41,81,760/- being 30% of rent expenses to the tune of Rs. 1,39,39,200/- was disallowed. The contention of the assessee before learned CIT(A) was that the amount paid was compensation for rent and not rent within the meaning of section 194J of IT. Act,1961. Hence, not liable for deduction of TDS and consequently no disallowance u/s 40(a)(ia) of the I.T. Act, 1961. The assessee further relied on the judgement of Hon'ble ITAT Mumbai in the case of Sanish Construction Pvt Ltd. in ITA no. 5963/mum/2013 and also in Sahana Dwellers Pvt. Ltd. similar view was taken by the Hon'ble Mumbai ITAT. 4. Learned CIT(A) held as under :- 4.2 Having considered the submission of the appellant, it is seen that in the cases relied upon by the appellant the Hon'ble Tribunal has made a distinction between 'rent' and 'compensation' in the context of redevelopment projects. It is held that the payments made by the developers to tenants/ members of the society for arranging alternative accommodation should not be regarded as 'rent , being subject to deduction of tax at source under section 194-1 of the Act. It is further noted that these rulings pertain to AY 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014-15, therefore, it is squarely covered by provisions of section 194-IA. The transaction involved in the instant case is Rs1,39,39,200/-, which is well above the threshold limit of Rs 50 Lakh as per 194-IA (3). Therefore, the appellant was liable to deduct TDS on the compensation paid. As the TDS is not done by the appellant on the compensation of Rs1,39,39,200/- paid, the disallowance made by the Ld AO, under section 40(a)(ia)of the Income Tax Act, 1961 amounting to Rs. 41,81,760/- being 30% of the total compensation paid is upheld. 4.4 Another contention taken by the appellant, in the alternatives, is that the recipients of the compensation would have included the said receipts in their ROIs and paid the due tax. From the submission, it is clear that the appellant itself is not sure whether the recipients of the compensation have filed the return or not. Also, besides stating that the recipients of the compensation would have included the said receipts in their ROIs, the appellant has not demonstrated with evidences/documents either before the Ld AO or during the appeal proceedings that the recipients of the compensation have declared the amount received in the return filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y paying rent or not. This is for the simple reason that tenants were displaced from the property where they were staying for construction of new building. On a perusal of section 194I of the Act, it is seen that under clause (i) rent has been defined as under: Explanation.-For the purposes of this section,- (i) rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,- (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee; 7. On a plain reading of the aforesaid definition of rent, it becomes clear that the payment made by the assessee does not come within the purview of rent as prescribed in the said provision as the assessee is not making such payment for use of any land, building, etc. On the contrary, if the facts involved are considered as a whole the payment made by the assessee is nothing else but in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
