January 2019

Section 194L and 194LA TDS State Metropolitan Development Authority Acquisition of land for projects paying sums to illegal squatters for their rehabilitation Not a case of compulsory acquisition from owners of land for which compensation paid No liability to deduct tax at source on payments to illegal squatters

K. B. Bhujle
Advocate

39.  CIT vs. MMRDA; 408 ITR 111(Bom):  Date of order: 6th September, 2018 A. Ys. 2000-01 to 2009-10

 

Section 194L and  194LA TDS State Metropolitan Development Authority Acquisition of land for projects paying sums to illegal squatters for their rehabilitation Not a case of compulsory acquisition from owners of land for which compensation paid No liability to deduct tax at source on payments to illegal squatters

 

For the purpose of implementing the scheme of the Government relating to road widening near the railway track, the assessee, the Mumbai Metropolitan Regional Development Authority, evacuated illegal and unauthorised persons who were squatters and hutment dwellers. The Assessing Officer was of the opinion that there was acquisition of immovable property for various projects by the assessee, for which the project affected persons were compensated under the Land Acquisition Act, 1894, He treated the assessee as the assessee-in-default u/s. 201(1) of the Act and liable to pay interest u/s. 201(1A) since the assessee had not deducted tax at source u/s. 194L/194LA. Accordingly, he computed the payment of tax u/s. 201(1) and interest u/s. 201(1A)

 

The Commissioner (Appeals) allowed the appeal and deleted the demand. The Tribunal upheld the order of the Commissioner (Appeals).

 

On appeal by the Revenue the Bombay High Court upheld the decision of the Tribunal and held as under:

 

i)    The possession of those persons was unauthorized and illegal and they were not the owners of the land on which they had squatted or built their illegal hutments and were trespassers. Therefore, there was no question of the land being acquired by the assessee.


ii)    The

--->

Past Issues

Flip-Book
HTML View
Current Issue