If a proprietorship Concern is paying maintenance charges to the Association of the Building, should it need to deduct TDS on that maintenance charges(if the charges are above 1 lakh in a year). The respective unit is in the name of proprietor, and the books of accounts of the concern are liable to Tax Audit. Please reply ASAP, and with respective section and case laws (if possible).
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Tds on maintenance charges paid to association of building
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Annual maintenance charges are made to defray common cause. There is no contract for maintenance between the society and the owner of the premises.It is a payment to common fund to be used for the benefit of the owners of the premises. The payment by the members of the association is governed by the principle of mutuality and the association does not derive any income.
Upheld by ITAT in the case of Mitsutor Shipping Agency Pvt Ltd Vs DCIT (ITAT Mumbai)
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