ITAT: Act for Non-deduction of TDS on Rent If Accommodation Services

The Income Tax Appellate Tribunal (ITAT), the Bench of Mumbai judged that TDS should not be deducted on the rent if the accommodation services were considered on a random basis. The taxpayer Dadiba kali Pundole Esplanade House has the business auction fine promoting, publishing, documenting, executing, decorative arts, and selling arts.

Under section 143(1) the taxpayer files its return A quick guide to the complete process of Income Tax Return Filing along with an introduction to e-filing, eligibility, and the deadline for filing the ITR. read more the taxpayer has filed its return of income mentioning his total income. Thus the case comes under the scrutiny process and notices have issued to the assessee. During the investigation reveals that the assessee has given Rs 4,68,543 for the accommodation at Royal Bombay Yacht Club towards which no TDS was deducted seen by the assessing officer.

Accordingly, a show cause was given to the assessee as to why the same should not be disallowed under section 40(a)(ia) of the Act for non-deduction of Tax Deducted at Source.

The assessee also declares that there is no payment made more than Rs 1,80,000. The assessee also declares to Circular No.5 dated July 30, 2020, in which he stated that the procurement relevant to a tax deduction for the source concerning the changes created under Finance act 1995.

Other than a single person TDS is also applied to the payments done by other persons. Which he said in his circular. The TDS under section 194-I Know everything about TDS section 194I, 194IB & 194IC that are related to rent under the income tax. Also, we covered some special points under section 194I of the act for the accommodation of the hotel must be taken as rent.

AO disallowed and added the same under section 40(a)(ia) of the Act for non-deduction of TDS. CIT(A) states the addition by holding that the assessee has given accommodation charges for the hotel accommodation which is on a regular basis from the club without deduction of TDS at the source.

“We are quite convinced with the arguments of the learned Counsel that this accommodation is occasional/ casual as no specific accommodation is earmarked and the same is made available to the assessee on the availability basis,”