TMI Blog2016 (3) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... I ) while considering the nature of payment received for alternative accommodation by the recipients held such payments at their hand as income from other sources instead of income from house property. That being the case, the payment made by the assessee also being in the nature of compensation for alternative accommodation cannot be treated as rent. Moreover, such compensation cannot be treated as rent for the simple reason that not only the assessee is not using any land and building but it may also be a fact that persons to whom such payments have been made may not be incurring any expenditure on account of rent. In any case of the matter, payments made by assessee under no circumstances can be construed to be coming within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income on 30th September 2010, declaring loss of ₹ 2,46,555. In the course of assessment proceedings, the Assessing Officer found that assessee had debited to the Profit Loss account an amount of ₹ 1,06,16,000 on account of compensation payment out of which on an amount of ₹ 51,84,000, assessee has not deducted any tax at source. On further verification, it was found by the Assessing Officer that the aforesaid amount of ₹ 51,84,000 was paid to 21 tenants on account of compensation. As the payment made to each individual was more than ₹ 1,20,000, the Assessing Officer called upon the assessee to explain why the payments made should not be disallowed under section 40(a)(ia). On account of non deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , who was entrusted to construct the building under the SRA Project, and the society constituted by the inhabitant of the building during the construction period, the assessee was required to provide alternative accommodation to the tenants as they have to vacate the building for the purpose of construction. However, as the assessee was not able to provide alternative accommodation to the tenants, he agreed to pay compensation to the tenants which got revised from time to time for enabling them to meet the expenditure to be incurred by them towards rent payable. Learned counsel referring to different clauses of development agreement submitted as there is no tenancy agreement between the assessee and the inhabitants of the property the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 40(a)(ia) is justified. Learned Departmental Representative further submitted, for a particular payment to qualify as rent it is not necessary that the deductor should be the owner of the property. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re they were staying for construction of new building. On 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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