VIJAY KUMAR GOYAL,BARWAHA vs. INCOME TAX OFFICER TDS II INDORE, INDORE

This appeal by assessee is directed against the order dated 06.12.2023 of the Commissioner of Income Tax (Appeal)-Lucknow for A.Y.2015-16.The assessee has raised following grounds of appeal:

“1.That the order u/s 201(1)/201(1A) of the income tax Act. 1961.is illegal, wrong, and time barred.

ITANo.13/Ind/2024 Vijay Kumar Goyal 2.That the order w / s 201(1) / 201 * (1A) of the income tax Act. 1961. deserves to be quashed 3.That the appellant craves leave to add, alter, amend and or withdraw any grounds of appeal on or before the hearing of appeal.”

2. Ld. AR of the assesse submitted that the assesse has purchased land with his brother on 21st 2024 for a total consideration of Rs.80,00,000/- vide sale deed dated 21.08.2014. Ld. AR has further submitted that the assessee has paid his share of Rs.40,00,000/- to the seller which is below the threshold limit of Rs.50,00,000/- as provided in section 194IA and therefore, the assessee was under no obligation to deduct TDS in respect of the said payment of purchase consideration. He has pointed out that in case of assesse’s brother Shri Chaman Kumar Goyal in ITANo.239/Ind/2023 this tribunal has considered and decided this issue in favour of the assesse vide order dated 09.10.2023. Thus, Ld. AR has submitted that this issue is now covered in favour of the assessee by order of this Tribunal in case of co-purchaser/brother of the assessee.

ITANo.13/Ind/2024 Vijay Kumar Goyal 4. We have considered rival submissions as well as relevant material on record. At the outset, we note that in case of co- purchaser /brother of the assessee an identical issue has been considered by this Tribunal vide order dated 09.10.2024 in ITANo.239/Ind/2023 in para 5 to 7 as under:

“5. We have considered the rival submissions as well as relevant material on record. The assessee has purchase his ½ share in the land in question along with his brother vide sale dated 21st August 2014. There is no dispute that the total consideration of the said land paid by the assessee and his brother is Rs.80,00,000/- and ½ shares of the assessee is Rs.40,00,000/-. The provisions of section 194IA required deduction of tax at source by transferee of any immovable property other than agricultural land to deduct tax at source(TDS) on consideration paid for transfer of the said property. Sub-section (2) of section 194IA carry out an exception that no deduction of TDS shall be made where the consideration for transfer of the immovable property and stamp duty value of the said property is less than Rs.50,00,000/-. As per section 194IA the obligation for deducting tax is on a person and in case in hand the assessee and his brother are two separate individuals and would be regarded as two separate persons for the purpose of section 194IA. Accordingly the consideration paid by the assessee would be taken into account for the purpose of liability of TDS u/s 194IA of the Act. The assesse has paid only Rs. 40,00,000/- which is less than the minimum consideration of the immovable property provided in sub-section (2) of section 194IA. Thus, what is relevant for threshold limit is the consideration actually paid or stamp duty valuation of immovable property. When the assessee has paid only Rs.40,00,000/- then the assessee is not liable to deduct TDS u/s 194 IA. An identical issue has been considered by the Jodhpur Bench of the Tribunal in case of Reetu Devi Nanecha (supra) in para 2.4 as under: “2.4 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 alongwith 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 1941A of the Act by considering the purchase cost of Rs.1.26 crores. We Page 3 of 6 ITANo.13/Ind/2024 Vijay Kumar Goyal notice that the provisions of Section 1941A 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 1941A 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 w/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 effective issued in Ground No 1 as raised by the assessee is allowed.”

ITANo.13/Ind/2024 Vijay Kumar Goyal 5.2 After perusing the Paper Book and the relevant provisions of law, we find that Section 194-IA(2) provides that Section 194-IA(1) will not applicable where the consideration for transfer of immovable property is less than Rs. 50,00,000/-. However, section 194-IA(1) is applicable on any person being a transferee, so section 194-IA(2) 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 law cannot be read as that in case of four separate purchase deed for four persons separately, Section 194-IA was not applicable, and in case of a single purchase deed for four persons Section 194-IA will be applicable. It is noted that AO has passed a common order u/s. 201(1) for all the four transferees. In order to justify his action since in case of separate orders for each transferee separately, apparently, provisions of section 1941A could not had been made applicable since in each case purchase consideration is only Rs. 37,50,000/-. This action of AO shows that he was also clear in his mind that with reference to each transferee, Section 1941A was not applicable. Hence, we are of the considered view that the addition made by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law, thus the same is deleted. As far as issue of charging interest is concerned, the same is consequential in nature, hence, need not be adjudicated. As regards the case laws cited by the Ld. DR are concerned, the same are on distinguished facts and therefore, not applicable in the present case. Accordingly, the grounds raised by the assessee stand allowed and as a result thereof, the appeal of the assessee is allowed.”

7. In view of the above facts and circumstances of the case when the assessee has paid consideration of Rs.40,00,000/- which is less than the threshold limit of Rs.50,00,000/- as well as in view of the decision as sited above the assessee cannot be held as assesse in default for want of ITANo.13/Ind/2024 Vijay Kumar Goyal TDS u/s 194-IA of the Act. Accordingly the impugned orders of the authorities below are set aside. 4.1 The issue is arising from the same facts and transaction of purchase of land by the assessee along with his brother and therefore, to maintain the rule of consistency we follow earlier order of this tribunal and decided this issue in favour of the assesse.

Accordingly the impugned orders of the authorities below are set aside.

Order pronounced in the open court on 08.05.2024.