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Tax Publishers
Dadiba Kali Pundole v. Asstt. CIT [ITA No.
779/Mum/2019, dt. 8-10-2020] : 2020 TaxPub(DT) 4150 (Mum-Trib)
Disallowance under section 40(a)(ia) for non-deduction of
TDS under section 194-I on room bookings in a club
Facts:
Assessee was saddled with disallowance under section
40(a)(ia) on their alleged payments to Royal Yacht Club. The assessing
officer's plea was that they ought to have deducted TDS under section 194-I for
the rooms taken by the assessee. It was the plea of the assessee that while
making the lump sum payment no specific earmarked rooms were given it was
simply an advance given where in foreign guests came and resided and the
payments got adjusted against their stay. When there was no earmarked space the
said payment cannot be construed as rent under section 194-I thus no TDS was
required to be made in the first place. The assessing officer/Commissioner
(Appeals) did not agree to this plea. On higher appeal --
Held in favour of the assessee that when no rooms were
earmarked to them no deduction under section 194-I could be invoked so was
section 40(a)(ia) as well. It was casual renting thus.
Alternate plea was also that the rooms were paid by the
consultants and it was reimbursed by the assessee.
Applied: Red
Chillies Entertainment Pvt. Ltd. v. ACIT in ITA No. 6655/Mum/2014 for
assessment year 2005-06 vide Order, dated 28-2-2017
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