The Income Tax Appellate Tribunal (ITAT), Jodhpur has held that the provisions of TDS would not applicable on the sale of property if the sale consideration do not exceed Rs. 50 lakhs.
The assessee-Company purchased a residential property for Rs. 60 lakhs from two people Shri Anant Ram Kumawat and Smt. Seema Kumawat who jointly owned the same. The sale was executed on behalf of the Joint Owners by Shri Vijay Kumawat who held Power of Attorney of the Joint Owners of the property to act on their behalf in relation to the property which was sold to the assessee. The Assessing Officer found that though the assessee company deducted TDS @ 1% of the sale consideration by quoting the PAN of Shri Vijay Kumawat, who was not the actual owner of the property and the owners of the property are Shri Anant Ram Kumawat and Smt. Seema Kumawat. According to him, TDS should have been deducted in the name of the actual owners and not in the name of the Power of Attorney holder. AO also found fault with the assessee not mentioning the PAN details of the joint owners so AO was of the view that the provisions of sec. 206AA of the Act was applicable and tax was deductible at source @ 20% of the purchase consideration.
The Tribunal noted that the sub-section(2) of Section 194-IA of the Income Tax Act provides an exception from deducting tax of 1% of the sale consideration when the sale consideration for the transfer of immovable property is less than Rs. 50 lacs.
“Therefore, in the instant case, we note that the total sale consideration is only Rs.60,12,000/- and the admitted fact as taken note by AO & Ld. CIT(A) is that Shri Anant Ram Kumawat and Smt. Seema Kumawat is the co-owners, and jointly owning the immovable property. So, the sale consideration has to be divided equally into two by virtue of sec. 46 of the Transfer of Property Act which prescribed that where the immovable property is transferred for consideration by persons having a distinct interest therein, the transferors are, in the absence of a contract to the contrary, entitled to share in the consideration equally. So, in this case, since there is no contract to the contrary could be pointed out by the Ld. DR for Revenue, in this case, consideration for each transferor comes to Rs.30,06,000/- each, which is below the prescribed limit of Rs.50 lacs given by the statute as aforesaid and, therefore, in the light of the same, we are of the opinion in the facts as discussed, supra, that the provisions of sec. 194- IA of the Act are not applicable in the instant case and, therefore, provisions of section 194-IA of the Act are not attracted,” The Tribunal said.
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