RAKESH GUPTA,KHANNA vs. DCIT/ACIT-TDS, CHANDIGARH

The grievance of the assessee is that ld.CIT (Appeals) has erred in upholding the order of AO passed u/s 201(1A) of the Income Tax Act, 1961.

With the assistance of ld. CIT DR, we have gone through the record carefully. It emerges out from the record that assessee had purchased a flat from M/s Homeland Buildwell Pvt. Ltd. According to the AO, it failed to deduct TDS u/s 194-IA(1) of the Income Tax Act. It is pertinent to note that two persons have jointly purchased a flat for a consideration of Rs.86,50,000/-. The share of the assessee was Rs.43,25,000/-. The AO was of the view that on payment of consideration more than Rs.50 lacs, purchaser is required to deduct TDS @ 1% of the consideration. The stand of the assessee is that his share was only Rs.43,25,000/- which is less than the prescribed limit of Rs.50 lacs and therefore, he was not supposed to deduct the TDS. In support of this contention, reliance was placed on the order of the ITAT, Jaipur in the case of Smt. Sandhya Gugalia, Jaipur Vs DCIT & 78/JP/2018. This appeal was decided on 08.06.2018. In this order, the Tribunal has held that where property is being purchased under joint ownership and each purchaser’s share does not exceed Rs.50 lacs, then Section 194-IA is not attracted.

On due consideration of this aspect, we are of the view that assessee was not under obligation to deduct TDS and therefore, he cannot be held in default u/s 201(1)/201(1A) of the Income Tax Act. Both the orders are, accordingly, quashed.

In the result, appeal is allowed.