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TMI Blog2022 (4) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the Appellant's case Section 194-IA was applicable and hence the Appellant was required to deduct tax at source u/s 194I-A . from the compensation for temporary alternative accommodation paid to the Society members. It is respectfully submitted that in the facts of the Appellant's case, provisions of section 194I-A are not at all attracted. 3. Without prejudice to the above grounds it is submitted that since the recipient of compensation/rent were liable to include the same in their ROI, and pay tax thereon, provisions of section 40(a)(ia) would have no application to the case of the Appellant. 4. It is also submitted that the learned CIT (A) erred in not giving an opportunity of hearing and rebutting the altogether differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation for rent and not rent within the meaning of section 194J of IT. Act,1961. Hence, not liable for deduction of TDS and consequently no disallowance u/s 40(a)(ia) of the I.T. Act, 1961. The assessee further relied on the judgement of Hon'ble ITAT Mumbai in the case of Sanish Construction Pvt Ltd. in ITA no. 5963/mum/2013 and also in Sahana Dwellers Pvt. Ltd. similar view was taken by the Hon'ble Mumbai ITAT. 4. Learned CIT(A) held as under :- 4.2 Having considered the submission of the appellant, it is seen that in the cases relied upon by the appellant the Hon'ble Tribunal has made a distinction between 'rent' and 'compensation' in the context of redevelopment projects. It is held that the payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd" means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (aa) "consideration for transfer of any immovable property" shall include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property;' (b) "immovable property" means any land (other than agricultural land) or any building or part of a building." 4.3 The process of re-development of land involves allowing possession of the land and building by the developer to be taken or retained in part performance of a contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal proceedings that the recipients of the compensation have declared the amount received in the return filed. In absence of any supporting evidence, this plea of the appellant is rejected." 5. Against the above order assessee appealed before the ITAT. 6. I have heard both the parties and perused the records. I find that the issue is covered in favour of the assessee by the decision of the ITAT in case of M/s. Sahana 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f them. Only because the assessee was not able to provide alternative accommodation to these tenants the assessee had to pay compensation for enabling the tenants to meet the expenditure to be incurred by them towards rent payable whether they are actually paying rent or not. This is for the simple reason that tenants were displaced from the property where 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the meaning of "Rent" as provided under section 194I. Thus, after considering the totality of the facts and circumstances of the case, we are of the 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. 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 fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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