TDS SECTION 194LA

[shamji bhanushali]

my client is individual and he has purchased land in 1980 in personal name. he has made valuation in the year 2013 value of land AS ON dated APRIL 2007 by government valuear value of Rs. 5.24 crores. after valuation of land he has transfer his land in his firms name where he is partner by journal entry passed in books value of ₹ 5.24 cr. he has paid capital gains in his personal income tax return. original land cost of Rs. 347000 lakhs and he has paid sum of ₹ 1.54 crore to encroachment i.e. unauthorized hut. this payment made in year 2014-15 and same was paid by firm on behalf of partners . firm has debited in personal account. firm has not claimed any expenses. firm has claimed only purchases cost of Rs. 5.24 cr. amount of ₹ 1.54 which paid to unauthorised encrochment paid without deduction of TDS. because firm has debited this amount on personal name and he has claimed that expenses in his capital gain. now my question is that individual can make compensasion without tds ? is firm responsible for this when firm has claimed cost of land ₹ 5.24 in firms pl account? reply.

AI Summary

TDS liability on compensation payments questioned where firm pays partner's encroachment removal without deduction, and firm land cost claim An individual transferred land to a firm by journal entry at a government valuation after reporting capital gains personally. The firm paid an amount to remove an unauthorized encroachment on behalf of the partner, debited that payment to the partner's account, did not claim it as a firm expense, and recorded the land at the higher cost. The core issues are whether TDS liability arises on the encroachment payment made without deduction and whether the firm is the withholding agent given its accounting treatment of the land.