TDS verification and segment-wise expense allocation led to partial relief, with one disallowance remanded and another deleted.

TDS-related disallowance under section 40(a)(ia) was not finally sustained because the assessee had produced challans and related details that had not been properly verified; the matter was remanded to the Assessing Officer for de novo examination. Building repair and maintenance was held to be attributable substantially to the mall and multiplex segment, with identifiable hotel expenses and supporting receipts, so the proportionate disallowance against rental income was deleted. The appeal thus succeeded partly, with one issue restored for fresh verification and the other allowed in favour of the assessee.

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Issues: (i) Whether the disallowance sustained under section 40(a)(ia) on account of alleged non-deposit of TDS was justified; (ii) Whether the disallowance of building repair and maintenance against rental income was sustainable.

Issue (i): Whether the disallowance sustained under section 40(a)(ia) on account of alleged non-deposit of TDS was justified.

Analysis: The assessee produced TDS challans and related details before the appellate forum. The existing record showed that those documents had not been verified and the finding that all challans were not furnished was recorded without examining the material placed on record. In these circumstances, the matter required fresh verification by the Assessing Officer.

Conclusion: The disallowance under section 40(a)(ia) was not finally sustained and the issue was restored to the Assessing Officer for de novo verification.

Issue (ii): Whether the disallowance of building repair and maintenance against rental income was sustainable.

Analysis: The expenses were found to relate substantially to the mall and multiplex segment, while the hotel segment expenses were separately identifiable. The record showed that only a limited amount pertained to the mall unit and that corresponding common area maintenance receipts were available. The comparable treatment in a subsequent assessment year also supported the assessee's claim. The proportionate disallowance made by treating the expenditure against rental income was therefore unjustified.

Conclusion: The disallowance of building repair and maintenance expenses was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded in part, with one issue remanded for fresh verification and the other allowed by deleting the addition.

Ratio Decidendi: Where documentary evidence supporting a TDS-related claim is produced but not properly verified, the matter requires fresh adjudication; and expenditure demonstrably attributable to a distinct business unit cannot be disallowed on an incorrect apportionment basis against rental income.

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