The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently, in an appeal filed before it, held that TDS under section 194IA is applicable, only when consideration for transfer immovable property is more than Rs.50 lac.
The aforesaid observation was made by the Jodhpur ITAT, when an appeal was preferred before it by the Assessee, as against the order of the CIT(A), National Faceless Appeal Centre, Delhi, dated 20-10-2021 for the assessment year 2015-16.
The grounds of the assessee’s appeal were that the impugned Demands of Rs.31,500 under Section 201(1) and Rs.16,380 under section 201(1A), are bad in law and on facts of the case, for want of jurisdiction and hence that the same kindly be deleted.
It was the submission of Shri Hemant Chhajed, C.A, the Counsel for the assessee that there was a transaction of purchase of immovable property on 3-09-2014 for a consideration of 1.20 crores and that the same was carried out by four persons.
He added that in the 1/4th share of the property, the consideration comes to Rs.31.50 lacs in the hands of the assessee, and that the provisions of Section 194IA of the Income Tax Act are applicable, only if the consideration is more than Rs.50.00 lacs.
Therefore, the AR prayed that the assessee should not have been treated as assessee in default under Section 201(1) and 201(1A) of the Act and hence that the order of the CIT(A), be quashed.
However, on the other hand, Shri S.M. Joshi, the JCIT-DR, vehemently supported the orders of the lower authorities.
Hearing the opposing contentions of both sides, and thereby perusing the materials available on record, the ITAT observed:
“We have heard the rival contentions and perused the materials placed on record. We notice that the assessee is an individual and as per facts of the case narrated before us and not disputed by the revenue authority, find that the assessee along with 3 other persons purchased an immovable property for a consideration of Rs.1.20 crores on 03-09-2014. The assessee paid 1/4th share of sale consideration i.e., Rs. 31.50 lacs. The AO treated the assessee in default applying the provisions of section 194IA of the Act by considering the purchase cost of Rs.1.26 crores. We notice that the provisions of Section 194IA of the Act are applicable where consideration for transfer of an immovable property is more than Rs.50 lacs. Since in the instant case, the consideration paid by the assessee is Rs.31.50 lacs, therefore, the provisions of Section 194IA of the Act cannot be invoked.”
“Thus, we fail to find any merit in the findings of the ld CIT(A) and the same is set aside and the demand raised by the AO u/s 201(1) for non-deduction of Tax Rs.31,500/- and interest levied u/s 201(1A) at Rs.16,380/- is deleted.”, the coram of Khul Bharat, the Judicial Member, and Manish Borad, the Accountant Member added.
Thus, the ITAT finally held:
“In the result, the appeal of the assessee is allowed.”
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