{"id":36214,"date":"2021-09-28T11:08:06","date_gmt":"2021-09-28T05:38:06","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=36214"},"modified":"2023-05-09T12:56:35","modified_gmt":"2023-05-09T07:26:35","slug":"bombay-hc-announces-builders-are-not-liable-to-deduct-tds-on-the-refund-amount-rerat","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/bombay-hc-announces-builders-are-not-liable-to-deduct-tds-on-the-refund-amount-rerat","title":{"rendered":"Bombay HC announces: Builders are not liable to deduct TDS on the refund amount!!"},"content":{"rendered":"

Lately, the Bombay High Court directed a construction contractor to square accounts with the apartment buyers hinged on an order that was issued in the first quarter of 2021. The builder was asked to refund the applicable amount without deducting the liable tax (TDS). This remarkable order was passed in the judiciary of SJ Kathawalla and Milind Jadhav. <\/span><\/p>\n

Numerous buyers booked flats in the timeframe of 2015 to 2016 specifically in a Malad (West) based real estate project. This project was initiated by the Ravi Group of Companies and was supposed to construct the Gaurav Discovery building at Malvani. The developer failed to complete the project in the given time frame and as a result, the buyers filed a petition with MahaRERA seeking a refund of the paid amount. As a result, a recovery warrant was issued that bounded the developer to pay a lump-sum, amount of INR 1.80 crore on 15th October 2018. <\/span><\/p>\n

Moving forward, to recover the remaining balance, in 2021 the buyers and developers entered within consent terms. As a resolution mechanism correlated with MahaRERA, the High Court passed a final recovery warrant in 2018 against the project builders. In the third month of 2021, considering the consent term orders, responsible builders agreed for paying an amount of INR 2.75 crores to the flat buyers. This amount was supposed to be disbursed in an installment manner. Although, the buyers received their July installment with a deduction of 10 percent as a TDS. Petitioners came forward against this as neither the recovery amount is not liable for taxation, and nor the RERA rules permit the same. <\/span><\/p>\n

The appointed counsel of the adjuring-buyers i.e. Subit Chakrabarti gave words on this and mentioned the refund amount was provided in the form of compensation which is not liable to TDS. At the same time, the senior counsel from the builder\u2019s part i.e. Zal Andhyarujina said the deduction was entirely based upon the Income Tax Act\u2019s – Section 194A. Furthermore, the law was analyzed to put forward an unbiased judgment. Concluding, it was found that the refund was offered as compensation to the buyers thus, the builders can\u2019t raise an objection to return back the deducted amount. Once again proving law is the same for everyone, builders were asked to give back the deducted amount to the petitioners.<\/span><\/p>\n

In concluding words, the High Court announced, reimbursement amount was contrary to the judgment debt, and can\u2019t be liable to TDS.<\/span><\/p>\n\n\n

Check Your Rera States<\/h3>\n\n\n\n
RERA Act<\/a><\/td>MahaRERA<\/a><\/td><\/tr>
Rera Punjab<\/a><\/td>Rera Delhi<\/a><\/td><\/tr>
Up Rera<\/a><\/td>Rera Mp<\/a><\/td><\/tr>
Rera karnataka<\/a><\/td>Rera Goa<\/a><\/td><\/tr>
Rera Assam<\/a><\/td>Rera Jharkhand<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Lately, the Bombay High Court directed a construction contractor to square accounts with the apartment buyers hinged on an order that was issued in the first quarter of 2021. The builder was asked to refund the applicable amount without deducting the liable tax (TDS). This remarkable order was passed in the judiciary of SJ Kathawalla […]<\/p>\n","protected":false},"author":39,"featured_media":36223,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[226],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/36214"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=36214"}],"version-history":[{"count":10,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/36214\/revisions"}],"predecessor-version":[{"id":83887,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/36214\/revisions\/83887"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/36223"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=36214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=36214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}