ITO, TDS-I, Nashik, Nashik V. Spl.Land Acquisition Officer-2,Collector Office Compound, Nashik

ITA 150/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49795 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 22-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TEJINDER SINGH
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH: B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI G.S. PANNU, AM I.T.A. NO. 150 TO 153/PN/2010 A.Y. 2005-06 TO 2008-09 I.T.O. TDS I, NASIK APPELLANT VS. THE SPECIAL LAND ACQUISITION OFFICER NO. 2 COLLECTOR OFFICE COMPOUND, NASIK TAN NSKS0438 G RESPONDENT APPELLANT BY : SHRI TEJINDER SINGH CIT DR RESPONDENT BY: NONE ORDER PER SHAILENDRA KUMAR YADAV ALL THESE APPEALS HAVE BEEN FILED BY THE REVENUE AG AINST THE RESPECTIVE ORDERS OF THE CIT(A) NASIK DATED 27- 10-2009 FOR A.Y. 2005-06 TO 2008-09 ON THE GROUND THAT THE CIT( A) ERRED IN HOLDING THAT THE LAND IN QUESTION WAS AGRICULTUR AL LAND. ACCORDINGLY, THE AMOUNT OF COMPENSATION ON COMPULSO RY ACQUISITION IS THUS BEYOND THE PURVIEW OF SECTION 1 94(LA) OF THE ACT. 2. THE ASSESSING OFFICER AFTER VERIFICATION OF THE DETAILS OF COMPENSATION PAYMENT NOTICED THAT THE ASSESSEE SHOU LD HAVE DEDUCTED TAX U/S 194LA OF THE ACT. ACCORDINGLY, HE PASSED AN ITA NO. 150 TO 153/PN/2010 SPECIAL LAND ACQUISITION OFFICE NO. 2 A.Y. 2005-06 TO 2008-09 - 2 - ORDER U/S 201(1) AND 201(1A) READ WITH SECTION 194- LA OF THE ACT FOR THE YEARS UNDER CONSIDERATION AND THE DEMAN D WAS RAISED AS UNDER: SR.NO. ASSESSMENT YEAR TDS TO BE MADE (RS) INTEREST U/S 201(1A) (RS) TOTAL DEMAND (RS) 1. 2005-06 1,31,66,582 49,56,582 1,81,23,165 2. 2006-07 2,16,802 69,508 2,86,345 3. 2007-08 53,207 9,045 62,252 4. 2008-09 38,29,546 2,53,111 40,82,657 3. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY WHO AFTER CALLING FOR THE REMAND REPORT H AS GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US. THE APPEALS ARE BEING DECIDED ON THE BASIS OF ARGUM ENTS ADVANCED BY THE LEARNED DR AND THE MATERIAL AVAILAB LE ON RECORD. 4. AFTER GOING THROUGH THE SUBMISSIONS OF THE LEARN ED DR AND THE MATERIAL ON RECORD, AS PER THE PROVISIONS O F SECTION 194-LA OF THE ACT, ANY PERSON RESPONSIBLE FOR PAYIN G ANY RESIDENT ANY SUM, BEING IN THE NATURE OF COMPENSATI ON OR THE ENHANCED COMPENSATION OR THE CONSIDERATION OR THE E NHANCED CONSIDERATION ON ACCOUNT OF COMPULSORY ACQUISITION, UNDER ANY LAW FOR THE TIME BEING IN FORCE, OF ANY IMMOVAB LE PROPERTY (OTHER THAN AGRICULTURAL LAND) SHALL DEDUCT TAX AT SOURCE. AS PER THE EXPLANATION TO THE SAID SECTION ITA NO. 150 TO 153/PN/2010 SPECIAL LAND ACQUISITION OFFICE NO. 2 A.Y. 2005-06 TO 2008-09 - 3 - (I) AGRICULTURAL LAND MEANS AGRICULTURAL LAND IN INDIA INCLUDING LAND SITUATED IN ANY AREA REFERRED TO IN ITEMS (A) AND (B) OF SECTION 2(14)(III) (II) IMMOVABLE PROPERTY MEANS ANY LAND (OTHER THAN AGRICULTURAL LAND) OR ANY BUILDING OR PART OF A BUI LDING. THE FINANCE (NO. 2) ACT, 2004, INSERTED SECTION 194 -LA OF THE ACT WITH EFFECT FROM 1-10-2004 AND THE CIRCULAR NO. 5 OF 2005 DATED 15-7-2005 EXPLAINED THE PROVISIONS AS UNDER: TAX TO BE DEDUCTED AT SOURCE FROM COMPENSATION OR ENHANCED COMPENSATION PAID ON ACQUISITION OF CERTAI N IMMOVABLE PROPERTY OTHER THAN AGRICULTURAL LAND W ITH THE GROWING DEVELOPMENT AND RAPID URBANIZATION IN T HE COUNTRY, LARGE AREAS OF LAND ANY MANY RESIDENTIAL BUILDING ARE BEING ACQUIRED BY VARIOUS AGENCIES INC LUDING GOVERNMENT AGENCIES AND OTHER LOCAL AUTHORITIES FRO M THE OWNERS WHO ARE COMPENSATED. WITH A VIEW TO CURB THE TENDENCY OF EVADING TAXES B Y NOT EPORTING INCOME COMPRISED IN THE COMPENSATION OR ENHANCED COMPENSATION, THE ACT HAS INSERTED A NEW SECTION 194LA IN THE INCOME TAX ACT WITH EFFECT FRO M 1 ST OCTOBER 2004, REQUIRING DEDUCTION OF TAX AT THE RAT E OF TEN PER CENT ON THE SUM OF COMPENSATION OR ENHANCED COMPENSATION RECEIVED. IT HAS ALSO BEEN PROVIDED THAT NO DEDUCTION OF TAX SHALL BE MADE WHERE THE IMMOVABLE PROPERTY IS AGRICULTURA L LAND, WHETHER SITUATION WITHIN THE MUNICIPAL LIMITS OR NOT, AND WHERE THE AMOUNT OF COMPENSATION OR ENHANC ED COMPENSATION PAID IS LESS THAN ONE HUNDRED THOUSAND RUPEES. SECTION 197 OF THE INCOME-TAX ACT RELATING TO CERTI FICATE FOR DEDUCTION OF TAX AT A LOWER RATES OR NO DEDUCTI ON OF TAX FROM THE ASSESSING OFFICER HAS ALSO BEEN AMENDE D TO INCLUDE A REFERENCE TO THE NEWLY INSERTED SECTION 1 94LA. CONSEQUENTIAL AMENDMENTS HAVE ALSO BEEN MADE TO SECTIONS 198, 199, 200, 202, 203, 204 AND 205 OF THE INCOME-TAX ACT. THESE AMENDMENTS TAKE EFFECT FROM 1 ST OCTOBER 2004. ITA NO. 150 TO 153/PN/2010 SPECIAL LAND ACQUISITION OFFICE NO. 2 A.Y. 2005-06 TO 2008-09 - 4 - 4.1. FROM THE ABOVE, IT IS CLEAR THAT ANY PERSON RE SPONSIBLE FOR PAYING COMPENSATION ON ACCOUNT OF COMPULSORY AC QUISITION OF ANY IMMOVABLE PROPERTY (OTHER THAN AGRICULTURAL LAND) SHALL BE LIABLE TO DEDUCT TAX AND THE EXPLANATION SPECIFI CALLY EXCLUDES THE AGRICULTURAL LAND WHETHER SITUATED WIT HIN THE URBAN LIMITS OR NOT. THE ASSESSING OFFICER IN HIS REMAND PROCEEDINGS VERIFIED THE TRANSACTION IN DETAIL AND HAS COME TO THE CONCLUSION THAT THE AMOUNTS IN QUESTION WERE IN FACT RELATED TO THE COMPENSATION PAID ON ACCOUNT OF ACQU ISITION OF AGRICULTURAL LANDS. THUS, IN VIEW OF THE SPECIFIC FINDING GIVEN BY THE ASSESSING OFFICER THE SAID AMOUNTS NEED NOT BE CONSIDERED FOR THE PURPOSE OF DEDUCTION OF TAX U/S 194LA OF THE ACT. IN VIEW OF THE ABOVE, THE CIT(A) WAS JUS TIFIED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE FOR DEDUCT ION OF TAX UNDER THE PROVISIONS OF SECTION 194-LA OF THE ACT I N RESPECT OF COMPENSATION PAYMENT MADE ON ACCOUNT OF COMPULSORY ACQUISITION OF LANDS TO VARIOUS PERSONS. ACCORDING LY, HE WAS JUSTIFIED IN CANCELLING THE ORDER MADE BY THE ASSES SING OFFICER U/S 201(1) AND 2-01(1A) OF THE ACT. SINCE ISSUE RA ISED IN ALL OTHER YEARS UNDER CONSIDERATION IS THE SAME, SO FOR THE REASONS MENTIONED IN THE PRECEDING PARAGRAPHS, ALL THE APPEALS ARE DECIDED IN FAVOUR OF THE ASSESSEE AS IN DICATED ABOVE. ITA NO. 150 TO 153/PN/2010 SPECIAL LAND ACQUISITION OFFICE NO. 2 A.Y. 2005-06 TO 2008-09 - 5 - 5. IN THE RESULT, ALL THE APPEALS OF HE REVENUE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF THE HEARING ON 30-5-2011. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED THE 30 TH MAY 2011. ANKAM COPY OF ORDER FORWARDED TO : 1. ASSESSEES 2. DEPARTMENT 3. CIT(A) II NASIK 4. CIT - (TDS) PUNE 5. ITAT, D.R. A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE.