TMI Blog2022 (12) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 under section 40(a)(ia) of the Act cannot be sustained - Appeal file by the assessee is allowed. - ITA No. 2592/Mum/2022 - - - Dated:- 20-12-2022 - Shri Aby T. Varkey, Judicial Member And Shri M.Balaganesh, Accountant Member For the Assessee : Shri Kiran Mehta, Ld. AR For the Revenue : Shri Vaibhav Jain, Ld. DR ORDER PER M. BALAGANESH (A.M): This appeal in ITA No. 2592/Mum/2022 for A.Y. 2017-18 arises out of the order by the Ld. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017-18. 3. In the interest of substantial justice, we are inclined to accept the reasons adduced by the assessee for delay. Accordingly, we condone the delay in filing the appeal before us and admit the appeal of the assessee for adjudication. 4. The assessee has raised the following grounds of appeal before us, which are as under:- 1. In the Facts and Circumstances of the Appellant's case and in Law, the Learned CIT (A) erred in confirming disallowance/addition of Rs. 38,18,023 made u/s 40(a)(ia) of the Income-tax Act, 1961. 2. The learned CIT (A) grossly erred in taking an altogether different view that in the facts of the Appellant's case Section 194-IA was applicable and hence the Appellant was required to deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure where the Old Flat Owners would be given area equal to their old flat area plus agreed additional area. During the construction period, the old flat holders were required to shift to temporary alternative accommodation as the old structure would be demolished. 6. In terms of Redevelopment Terms agreed between the Society and its Members, the assessee had paid a sum of Rs. 1,39,39,200 to various members of the Society as rent/compensation for shifting to temporary alternative accommodation during the construction period. The Assessee had not deducted any TDS from the amounts paid as aforesaid, as in view of the Assessee such payments did not attract any of the TDS Provisions. In the course of assessment, the Ld. AO was of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahana Dwellers Pvt. Ltd. Vs. ITO (ITA No. 5963/Mum/2013 vide order dated 24.2.2016). In the said case on identical issue it was held as under : 6. We have considered the submissions of the parties and perused the material available on record. Undisputedly, the property in question where the tenants were staying earlier was owned by the Brihan Mumbai Mahanagar Palika and the tenants were paying rent to the Municipal Corporation. It is also a fact on record that the subject building having become old and in a dilapidated condition the authorities concerned decided to demolish the said building and construct a new building in its place under the SRA Project and the construction of the new building was entrusted to the assessee. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 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. 7. In find that learned CIT(A) has erred in distinguishing the same by referring to section 194-IA of the I.T. Act. This section is not at all applicable to the facts here. Hence following the precedent from ITAT, I set aside the order of the learned CIT(A) and decide the issue in favour of the assessee. 9. Respectfully following the aforesaid decision, the grounds raised by the assessee are allowed. 10. In the result, the appeal file by the assessee is allowed. Order pronounced on 20/12/2022 by way of proper mentioning in the notice board. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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