Whether deduction of tax at source is required here

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 April 2013 Hello,

A is a NRI. He owned a piece of land in India.

B is an indian resident engaged in the profession of Land Developer and Builder.

B entered into an agreement with A to build residential apartment with 50 flats where 15 will be owned by A and remaining 35 by B.

S an Indian resident bought a flat from B for say Rs 50.00 Lakhs. S was told about the fact that he is buying the Flat from B's quota of flats and not from A’s ownership.

IT Department issued a notice to S about non deduction of TDS from the payment made to A. S alleges that he is in no way concerned with A and has dealt with in B in good faith.

Is it an example of Business Connection in India and whether S is liable to deduct the TDS? Or S’s stand is correct.

Please help.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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21 May 2013 With the recent amendment the TDS on dealing in purchase and sale is to be deducted. Since it is from the quota of B the sale deed will speak about it and B will be liable to deduct TDS