KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD ,DHARWAD vs. INCOME TAX OFFICER TDS WARD-1 , HUBLI

PER SHRI PAVAN KUMAR GADALE, JM : The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals), Hubli passed u/s 201(1) and 201(A) r.w.s. 254 and 250 of the Income Tax Act, 1961. 2. The assessee has raised the following grounds of appeal as under :

2 ITA No.2125/Bang/2017

3 ITA No.2125/Bang/2017

4 ITA No.2125/Bang/2017 Tribunal in ITA No.1375/Bang/2013 dt.23.09.2015 has remitted the matter to the file of Assessing Officer for verifying the agreements with land owners to ascertain where the acquisition falls under compulsory acquisition or not and whether TDS has not been deducted on compensation payments on acquisitions which are in accordance with the Section 29(2) of KIAD Act. The ld. Assessing Officer as per the directions of the Hon'ble Tribunal, made verification whether TDS was deducted on the compensation payments and such acquisitions are carried out as per KIAD Act. The Assessing Officer vide letter dt.26.02.2016 to assessee required furnishing of all agreements. But in spite of providing adequate opportunity there was no proper compliance and the assessee has filed a letter on 24.02.2016 along with copies of 101 agreements out of more than 1000 agreements as per the assessee's claim and in respect of compensation payment of Rs.144,48,16,687. But the assessee has furnished agreements only to the extent of Rs.30,96,92,218. The Assessing Officer has verified the agreements and also recorded statement under Section 131 of the Act from the Asst. Commissioner of Special Land Acquisition, KIADB, Dharwad. The Assessing Officer found that the assessee could not establish that the TDS was not deducted at the time of payment in respect of Agreements produced and not collecting subsequently. Hence the Assessing Officer observed that the compensation paid shall attract TDS under Section 194LA of the Act and rejected the assessee's contentions and

5 ITA No.2125/Bang/2017 finally raised the demand payable vide order under Section 201 and 201A Dt.8.12.2016 of Rs.4,06,95,378. Aggrieved by the A.O’s order, the assessee has filed an appeal with the CIT (Appeals) and the Appellate Authority considering the grounds of appeal and submissions, facts and the nature of compensation paid observed that the assessee has not provided land owner Agreements as directed by Hon'ble Tribunal and since there is no alternative available to the Assessing Officer. It was held that the land acquired under Section 29(1) of the Act of KIADB Act to pay compensation after deduction of tax (TDS) under Section 194LA of the Act and dismissed the assessee's appeal. Aggrieved by the order of CIT (Appeals), the assessee filed an appeal before the Tribunal. 4. At the time of hearing, the learned Authorised Representative submitted that the assessee has complied with the directions of the Tribunal but there are more than 1000 agreements which could not be immediately available and prayed for an opportunity and also TDS provisions are not applicable on payments and filed Paper Book to substantiate the nature of acquisition. Contra, the ld. DR supported the orders of the CIT (Appeals). 5. We heard the rival submissions and perused the material on record. The sole disputed issue is with respect to deduction of tax at source under Section 194LA on the acquisition of land by the assessee. The learned Authorised Representative

6 ITA No.2125/Bang/2017 submitted that there are more than 1000 agreements and the assessee is not in a position to collect entire agreements and produce before the Assessing Officer and required time to substantiate with evidence when a querry was raised to the ld. AR on the Notification issued by the Land Acquisition Act Committee. We found that the ld. AR could not substantiate with submission or evidence on the nature of the agreements and Notifications issued for acquisition under compulsory acquisition Scheme. Accordingly, to meet the ends of justice and voluminous Agreements to be submitted on acquisition before the Revenue authorities, we consider proper to restore the entire disputed issues to the file of Assessing Officer for verification and examination of agreements to determine whether the land acquisition is compulsory or not and applicability of TDS provisions under Section 194LA of the Act and further the assessee should be provide adequate opportunity of hearing and co-operate in submitting the information and details expeditiously and allow the grounds of appeal of assessee for statistical purposes. 5. In the result, the assessee's appeal is allowed for statistical purposes. Order pronounced in the open court on 8th Nov., 2019. Sd/- Sd/- (B.R. BASKARAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 08.11.2019. *Reddy GP

7 ITA No.2125/Bang/2017 Copy to 1. The appellant 2. The Respondent 3. CIT (A) 4. Pr. CIT 5. DR, ITAT, Bangalore. 6. Guard File

By order

Assistant Registrar Income-tax Appellate Tribunal Bangalore