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TMI Blog2024 (7) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... l filed by assessee is arising out of the order of the National Faceless Appeal Centre, Delhi dated 28.02.2023 [here in after ld.CIT(A)(NFAC) ] for assessment year 2014-15 which in turn arise from the order dated 22.02.2021 passed under section 201(1) r.w.s. 201(1A) of the Income Tax Act, by the ITO, TDS, Bhilwara. 2. In this appeal, the assessee has raised following grounds: - 1. Each partner/owner of a joint property, their share only should be considered separately for deduction of TDS u/s 194-IA. 2. That the Ld. Commissioner (Appeals) had erred in law as well as in facts by sustaining the addition as an default in compliance of provision of Sec. 194A and request your good self to set aside the same. 3. Brief fact of the case is that the assessee along with his brother Shri Nitin Kabra has purchased an immovable property worth Rs. 65,11,000/- from UIT Bhilwara on 30.07.2013. The ld. ITO, Bhilwara submitted that as per provisions of sub-section (1) of section 194-IA of the Income Tax Act, 1961, any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any Imm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the property in aggregate is more that Rs.50 lakh then provisions of section 194-1A will be applicable. In such case, TDS will be deducted and deposited by each buyer in respect of their respective share in the property. This is so because the provisions of subsection (2) of section 194-IA read: (2) No deduction under subsection (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, both, is less than fifty lakh rupees. Thus, the Grounds of Appeal are hereby dismissed. 6. As a result, the appeal is dismissed. 5. As the assessee did not receive any favour from the appeal filed before ld. NFAC/ CIT(A). The present appeal filed against the said order of the ld. NFAC before this tribunal on the grounds as reiterated in para 2 above. To support the grounds so raised the ld. AR appearing on behalf of the assessee has placed reliance on the written submission which is extracted herein below:- Fact of Case: In the above referred appeal assessee has purchased jointly an residential immovable land, Plot No. 1-V-33, Cornor, R.C. Vyas Colony, Bhilwara having measurement 237.5 Sq. yard has been allotted from UIT B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal by stating that: The threshold limit of Rs.50lakh is with reference to each property. If a property transaction involves more than one buyer, and share of each buyer in the property is less that Rs.50 lakh but the value of the property in aggregate is more that Rs.50 lakh then provisions of section 194-IA will be applicable. In such case, TDS will be deducted and deposited by each buyer in respect of their respective share in the property. This is so because the provisions of subsection (2) of section 194-IA read: (2) No deduction under subsection (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, both, is less than fifty lakh rupees. The assessee has referred following case laws which are relevant to the case, however not accepted the contains refer therein which is bad in law: 1. Vinod Soni vs. ITO Tds, Faridabad, ITA No. 2736/Del/2015, ITAT Delhi Bench 'B'. 2. Shree Shambhu Dayal Sarrad, Jaipur vs. ITO Ward-7(1), jaipur, ITAT Jaipur bench. 3. Smt. Sandhya Gugaliya-Jaipur vs. DCIT, CPC-TDS, Ghaziabad, UP by ITAT Jaipur Bench, Jaipur. 4. Smt. Sapna Sanjay Raisoni, Pune vs. ITO Ward-2(1), Pune, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R NON- DEDUCTION OF TAX UNDER SECTION 194-IA OF THE ACT. 1.1 The appellant, during the financial year 2013-14, along with his brother Shri Nitin Kumar Kabra jointly purchased an immovable property bearing Plot No. 1-V-33, R.C. Vyas Colony, Bhilwara worth Rs. 65,11,000 from UIT, Bhilwara on 30.07.2013 which was registered in the office of the Sub- Registrar Bhilwara. Both the buyers i.e., Sachin Kumar Kabra and Nitin Kumar Kabra have equal share in the immovable property purchased i.e.. 32,55,500 each/-. 1.2 Going forward, based on the information available with the income tax Department, Learned Income Tax Officer (TDS), Bhilwara issued the Show cause notice u/s 201(1)/201(1A) dated 19.01.2017 and 27.12.2018 to the appellant for non- deduction of tax at source at the time of purchase of an immovable property of more than Rs. 50 lacs as per the provisions of section 194-IA of the Act. The then Authorized representative of the appellant filed the written submission in response to the show cause notice. In the written submission of appellant AR, it was submitted that the provisions of the section 194-IA of the Income Tax Act 1961 is not applicable in the instant case since the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income- tax thereon. (2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees. (3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section. Explanation. -For the purposes of this section, - (a) agricultural land means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (b) immovable property means any land (other than agricultural land) or any building or part of a building. From the perusal and plain reading of the above provision of section 194- IA of the Income tax Act 1961, it is very clear and settled law of the position that for deducting tax at source on transfer of immovable property other than agricultural land, three conditions must be satisfied which are reproduced as under a) Consideration for transfer should be paid by any person being a transferee . Here the Act does not used the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also, obviously, applicable only w.r.t. the amount related to each transferee and not with reference to the amount as per sale deed. In the instant case there are 04 separate transferees and the sale consideration w.r.t. each transferee is Rs. 37,50,000/-, hence, less than Rs. 50,00,000/- each. Each transferee is a separate income tax entity therefore, the law has to be applied with reference to each transferee as an individual transferee / person. It is also noted that Section 194-IA was introduced by Finance Act, 2013 effective from 1.6.2013. It is also noted from the Memorandum explaining the provisions brought out alongwith the Finance Bill wherein it was stated that in order to reduce the compliance burden on the small tax payers, it is further proposed that no deduction of tax under this provision shall be made where the total amount of consideration for the transfer of an immovable property is less than fifty lakhs rupees. We further find that the main reason by the AO is that the amount as per sale deed is Rs. 1,50,00,000/-. The law cannot be interpreted and applied differently for the same transaction, if carried out in different ways. The point to be made is that, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Delhi. I.T.A. No.8740/DEL/2019, The Hon'ble Delhi ITAT held that 7.2 From the text and tenor of provisions of Section 1941A, it is evident that the obligation under Section 1941A relates to a transferee responsible for paying to a resident transferor any sum by way of consideration for transfer of immovable property. Secondly, obligation to deduct tax arises at the time of credit of such sum to the account of the transferor or at the time of payment of such sum to the transferor. Thus, two factors co-exist for applicability of Section 1941A. The first factor, as noted above, relates to the obligation of the transferee and the second factor fixes obligation to deduct tax at the time of credit or payment. When read combinedly; while the first limb of Section 1941A refers to a singular expression, i.e., 'transferee' (in distinction to transferee(s) combined), second limb provides for time of discharge of obligation which in turn, depends on the action of each transferee (in exclusion to other transferee) i.e., either credit in its accounts or actual payment. Thus, when the provision is read as a whole, it gives an infallible impression that obligation cast under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the matter the assessee failed to deduct tax as the consideration of the property is exceeding is Rs. 50,00,000/-. Based on the above arguments the ld. DR supported the orders of the lower authorities. 8. We have heard the rival contentions, perused the material placed on record and gone through the judicial precedent cited by both the parties to drive home their respective contentions. It is not disputed that the assessee has purchased the land along with his brother from UIT, Bhilwara and if consideration of the property is divided between two assessee then the consideration qua assessee is below Rs. 50,00,000/-. The provision of the section 194-IA on this aspect is required to be seen to decide the issue on hand:- Payment on transfer of certain immovable property other than agricultural land 25 . 194-IA. (1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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