Assessee entered into an agreement with a builder for purchase of two residential flats .Flats booked were not delivered in committed period. Real Estate Regulatory Authority directed builder to refund advance amount paid by assessee with compensatory interest .Builder deducted TDS on amount of compensatory interest paid to assessee .\u00a0 The petition was filed for seeking directions for the recovery of arrears due to the petitioners under a Recovery Warrant dated 15 th October 2018 passed by the Maharashtra Real Estate Regulatory Authority against the respondents . The respondents have paid the compensation in Instalments as per the consent order . Respondent builder\u00a0 deducted the tax at\u00a0 source on the amount of interest payable as per the consent terms . Petitioners moved application before the Court urging that the such amounts could not in law be deducted . Court held that\u00a0 the amount so payable is in the nature of a judgement debt or akin to a judgement debt , the payment of which cannot establish a debtor -creditor relationship between the parties . As such the said sum or any part thereof cannot be liable to tax deducted at source under the relevant provisions of the Income tax Act\u00a0 on interest component .\u00a0 Interim application was allowed. (AY 2021-22)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 194A : Deduction at source – Interest other than interest on securities \u2013 Builder \u2013Judgement debt – Compensatory interest failure to hand over possession of flat \u2013 TDS was not liable to be deducted. [ S. 2(28A) , Real Estate ( Regulation & Development ) Act 2016 (RERA ) Art , 226 ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-24602","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-6oO","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/24602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=24602"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/24602\/revisions"}],"predecessor-version":[{"id":24603,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/24602\/revisions\/24603"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=24602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=24602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=24602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}