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.
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