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2015 (9) TMI 134 - AT - Income TaxTDS liability u/s 194LA - payments in lieu of the agriculture land acquired by JDA for carrying out its development plans - assessee in default - Held that - From the record, it emerges that the assessee demonstrated its case for no liability of TDs before the ACIT TDS that not only in terms of plain reading of Section 194LA but also furnished the desired information in the proforma and enclosures as advised by the AO to be furnished in the order to hold JDA as notliable under explanation (i) above. Having complied with the requirement, assessee has discharged its onus. The liability of assessee u/s 194LA cannot be extended to go beyond the plain meaning of the letters of section and infuse such conditions which are not mentioned in the provisions. Thus the assessee complied with requirements asked for by the AO. There is no adverse comment on this issue.Section 194A does not provide any physical verification of the assessee to inspect the fields and find out whether the lands are actually cultivated or not. What section imposes is determination of the record which has been done by the assessee. Barani land is a type of agricultural land which is clearly evident from Revenue regulations and record placed on the paper book. The objection raised by the AO and ld. CIT(A) about Girdawari is irrelevant and no-consequential.Tehsildar appointed by JDA cannot be denied to be a Revenue Officer inasmuch as he works as a Revenue Officer in terms of JDA Act. The language of Section 194LA being plain and simple it provides no physical verification of land by LAO about carrying on of agricultural operations. In the framework of sec. 194LA, there is no need of applying rules of interpretation and imposing further condition to go beyond the scope of obligation as prescribed under the Act In view thereof, we hold that the assessee has been able to demonstrate from the record that impugned agricultural land acquired by the assessee are agricultural land on per records and in terms of Section 194LA, Explanation (i). There is no obligation to deduct any TDS thereon. - Decided in favour of assessee.
Issues Involved:
1. Applicability of TDS under Section 194LA for compensation paid on acquisition of agricultural land. 2. Determination of whether the acquired land qualifies as agricultural land under Section 194LA. 3. Validity of the evidence provided by the assessee to claim exemption from TDS. 4. The role and authority of the Tehsildar appointed by JDA in certifying the nature of the land. 5. The implications of non-deduction of TDS and the resultant liability under Sections 201(1) and 201(1A). Issue-wise Detailed Analysis: 1. Applicability of TDS under Section 194LA for compensation paid on acquisition of agricultural land: The core issue revolves around whether the compensation paid for the acquisition of agricultural land by the Urban Improvement Trust (JDA) is subject to TDS under Section 194LA. The assessee argued that no TDS is applicable for agricultural land as defined in Section 194LA, which includes land situated in urban areas. The AO, however, held that the JDA was liable for TDS as it failed to conclusively prove that the lands were agricultural, leading to demands under Sections 201(1) and 201(1A). 2. Determination of whether the acquired land qualifies as agricultural land under Section 194LA: The assessee provided Jamabandi reports and affidavits from landowners, along with certificates from a Tehsildar appointed by JDA, to substantiate the agricultural nature of the land. The AO and CIT(A) rejected these documents, arguing that the Tehsildar was not a jurisdictional revenue officer and that the Jamabandi reports did not confirm the actual use of the land for agricultural purposes. The AO conducted further inquiries and concluded that the lands were barren and not used for agriculture for several years, thus not qualifying as agricultural land. 3. Validity of the evidence provided by the assessee to claim exemption from TDS: The assessee contended that the evidence provided, including certificates from the Tehsildar and affidavits from landowners, was sufficient under Section 194LA. The AO and CIT(A) disagreed, stating that the Tehsildar's certification was not valid as he was an employee of JDA and not a jurisdictional officer. The AO also noted that the Jamabandi reports did not indicate the actual agricultural use of the land, and no Girdawari reports were provided. 4. The role and authority of the Tehsildar appointed by JDA in certifying the nature of the land: The assessee argued that the Tehsildar appointed by JDA was a legitimate revenue officer under the JDA Act and that his certification should be considered valid. The AO and CIT(A) dismissed this argument, emphasizing that the Tehsildar was not a jurisdictional officer and that his certification did not adequately verify the agricultural use of the land. 5. The implications of non-deduction of TDS and the resultant liability under Sections 201(1) and 201(1A): The AO and CIT(A) held that the JDA was liable for TDS on the compensation paid for the acquired lands, as they did not qualify as agricultural land. Consequently, the JDA was deemed an assessee in default under Sections 201(1) and 201(1A), resulting in demands for tax and interest. The assessee contested this, arguing that it had complied with the requirements of Section 194LA and that the demands were unjustified. Conclusion: The Tribunal held that the assessee had complied with the requirements of Section 194LA, including providing the necessary documentation as prescribed by the AO. It was determined that the Tehsildar appointed by JDA was a valid revenue officer under the JDA Act, and his certification, along with the other provided documents, was sufficient to classify the lands as agricultural. The Tribunal emphasized that Section 194LA does not mandate physical verification of agricultural operations and that the plain language of the section should be adhered to. Consequently, the Tribunal reversed the orders of the lower authorities, quashed the demands raised under Sections 201(1) and 201(1A), and allowed the appeals of the assessee.
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