TaxTMI 
TaxTMI 
2025 (7) TMI 426
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....s received a sum of Rs. 130,80,41,280/- as consideration from SRA for a project in the name of Aashiyana CHS and that there was no agreement or MOU or JV entered into at any stage of development with any other developer for AY 2016-17. Based on the said information the AO re-opened the assessment by issue of notice under section 148 dated 23.06.2021. Subsequently in view of the decision of the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal the notice under section 148 was deemed as notice issued under section 148A(b) and after considering the submissions the AO passed an order under section 148A(d) on 27.07.2022. Thereafter notice under section 148 was issued on 29.07.2022 and in response the assessee vide letter dated 10.02.2023 submitted the computation of total income. During the assessment proceedings after verification of details from SRA and from the assessee the AO found that the receipt of Rs. 130,80,41,280/- was a consideration received from sale of TDR and the same has been offered under the head "Capital Gain" in the return of income. The SRA has also clarified that no consideration has been paid to the assessee against any redevelopment. Ther....
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.... payment of rentals, in case he fails to provide alternate accommodation/transit accommodation to the tenants. Therefore, it is not out of place here to hold that any payments made by the developer to the tenants for usage of their rights in slum property in the nature of rent only. 7.4.3 In furtherance to the above, it is essential to mention here that it is held by the judicial forums that sum of money for the payments of rentals during the redevelopment work would not be taxed only to the extent it was actually utilized for rent payments. Thus, it cannot be said that the receipts in the hands of deductees are not taxable, hence not liable for TDS. Since, any non-utilized money in the hands of recipients shall be taxable, the onus lies on payer to deduct the TDS u/s 194I of the Act. 7.4.4 To conclude, the provisions of section 194I as well as various judicial pronouncements cast responsibility on the developer to deduct TDS so as to enable proper tracking of the utilization of the amounts paid to the tenants. 7.4.5 In view of the above discussion, it can be safely held that the claim of the assessee that it has paid compensation to the dwellers for the ....
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....eleting the disallowance of expenses of Rs. 2,33,65,500/- on account of non deduction of TDS qua rent paid to the tenants without considering the fact that the said payment has been made to the slum dwellers, to meet the expenditure incurred towards rent during the year under consideration. We observe from the impugned order that the Ld. Commissioner deleted the addition made on account of expenses of Rs. 2,33,65,500/- on account of non-deduction of TDS, not only by following the judgment passed by the Tribunal but in fact also followed the judgment of the Hon'ble Jurisdictional High Court in the case of Sarfaraz S Furniturewala Vs. Afshan Sharfali Ashok Kumar & ors. (Writ petition No.4958 of 2024) dated 15.04.2024 wherein the Hon'ble Jurisdictional Bombay High Court has also dealt with the identical disallowance and ultimately held that transit rent is not to be considered as "revenue receipt" and is not liable to be taxed, as a result there will be no question of deduction of TDS from the amount payable by the developer to the tenant. The conclusion drawn by the Hon'ble High Court is reproduced herein below: "10. The ordinary meaning of Rent would be an amoun....
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....of delayed payment of PF/ESI - Rs. 10,72,180/- 8. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) deleted the disallowance under section 40(a)(ia) made towards non-deduction of tax at source under section 194I on the payments made to slum dwellers towards alternate accommodation. The CIT(A) in this regard placed reliance on the decision of the Co-ordinate Bench in assessee's own case for AY 2012-13 (supra). The CIT(A) confirmed the disallowance made by the AO by placing reliance on the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT ([2022] 143 taxmann.com 178 (SC)). The relevant observations of the CIT(A) in this regard are extracted below: "15. I have considered the assessment order, submission of the appellant and facts available on record. During the assessment proceedings, the AO found from the Schedule No. 20(b) of the tax audit report that the amount of Rs. 10,17,799/- and Rs. 54,381/- on account of employees' contribution to PF and ESIC, respectively has not been paid within the due date as prescribed in the relevant Acts. Therefore, this amount will not be eligible for deduction u/s 36(....
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....the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date, is correct and justified. The non-obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessee's are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions- which are deducted from their income. They are not part of the assessee employer's income, nor are they heads of deduction per se in the form of statutory pay out. They are others' income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They ha....