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TMI Blog2024 (7) TMI 1591X X X X Extracts X X X X X X X X Extracts X X X X ..... a "consideration" should have been paid as part of a share in the land or building or both including cash payments.
In the given case, the payment towards alternate accommodation/hardship allowance is in the nature of a compensation paid by the developer towards hardship suffered by the owner / tenant due to dispossession and is not paid as part of a share in the land or building or both. The terms of the agreement in assessee's case makes it clear that the payment is made towards compensation for handing over the vacant possession of the property and towards rent if any payable by the tenants in the alternate accommodation until the completion of the re-development. Therefore we are of the view that the "Alternate accommodation charges / rent" cannot be treated as a consideration paid as part of a share in the land or building or both under the specified agreement, and would not fall within the provisions of section 194IC. No default for non-deduction and non-payment of TDS u/s 194IC.
Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... .3 In this regard it is observed that the subject matter of dispute is the payment made by the assessee to the owners/tenants of the Dalal Co-operative Housing Society towards alternate accommodation during the period of redevelopment/ re-construction of the Dalal Estate Apartments property. During such period of re-development/re-construction, the original inhabitants of the property had to vacate the property and to move to any alternate accommodation. These payments were to be made to compensate them for making arrangement of this alternate accommodation The AO has brought these payments under the ambit of TDS by holding that these payments were made as per the "specified agreement within the meaning of section 45(5A) of the Act and hence were liable for TDS as per the provisions of section 194IC of the Act. The appellant has first tried to argue that these payments were not required to be subjected to TDS as these were not rental payments within the meaning of section 1941 of the Act. In this regard, it firstly held that the AO has not invoked section 1941 of the Act in the case of the appellant for the year under consideration and so the arguments of the appellant in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement means a registered agreement in which a person owning land or building or both agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash; (iii) "stamp duty value means the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of an immovable property being land or building or both.' 7.4 A plain reading of section 1941C makes it clear that an assessee is liable for tax deduction while making a payment under an agreement referred to in section 45(5A) of the Act. The "specified agreement under section 45(5A) means a a registered agreement in which a person owning land or building or both allows a person to develop a real estate project on such land or building. 7.5 In the present case, the AO has conclusively proved in his order that the re development agreement entered into by the assessee was indeed a specified agreement within the meaning of section 45(5A) of the Act. The agreement which the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal are accordingly dismissed." 6. The assessee is in appeal against the order of the CIT(A) before the Tribunal. The common issue arising out of the various grounds raised by the assessee is whether the payment made by the assessee to the tenants of M/s Dalal Estate Co-operative Housing Society Ltd. towards alternate accommodation charges/hardship allowance/rent are liable for tax deduction under section 194IC of the Act. 7. The ld. AR submitted that the provisions of section 45(5A) talks about the consideration paid towards transfer of a capital asset and that in assessee's case the alternate accommodation charges are not paid towards transfer of capital asset. The ld AR further submitted that the impugned payments are not consideration received within the meaning of section 45 and that the same is a capital receipt not chargeable to tax as has been held by the Hon'ble Jurisdictional High Court. The ld. AR also submitted that the tenant who is the recipient of the amount is not the owner of the land and is party of the re-development agreement in the capacity as a tenant/member and therefore the AO is not correct in holding that the payment would attract TDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said certificate, of his share, being land or building or both in the project, as increased by 83[the consideration received in cash, if any,] shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset: Provided that the provisions of this sub-section shall not apply where the assessee transfers his share in the project on or before the date of issue of the said certificate of completion, and the capital gains shall be deemed to be the income of the previous year in which such transfer takes place and the provisions of this Act, other than the provisions of this sub-section, shall apply for the purpose of determination of full value of consideration received or accruing as a result of such transfer. Explanation.--For the purposes of this sub-section, the expression-- (i) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force; (ii) "specified agreement" means a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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