M/s. Oxcia Enterprises Private Limited, Bhilwara V. DCIT, Circle-TDS, Udaipur

ITA 291/JODH/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6372 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 07-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax; TDS
• Section: 206AA; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.K.SAINI, VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO.291/JODH/2018 (ASSESSMENT YEAR-2016-17 ) M/S. OXCIA ENTERPRISES PRIVATE LIMITED, C/O KALANI & CO.,CHARTERED ACCOUNTANTS, 5 TH FLOOR, THE MILE STONE GANDHI NAGAR TURN, TONK ROAD, JAIPUR-15. PAN: AAGCM5419E VS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- TDS,UDAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SH. SUNIL PORWAT,CA RESPONDENT BY SH. P. K. SINGHI, DR DATE OF HEARING 06.05.2019 DATE OF PRONOUNCEMENT 06.05.2019 O R D E R PER A. T. VARKEY, J.M. THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS-1, UDAIPUR DATED 09.04.2018 FOR AY 2016-17 ON THE FOLLOWING GROUNDS OF APPEAL. 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER OF DEPUTY CIT RANGE-TDS RAISING DEMAND OF RS.14,30, 856/- U/S. 201(1)/201(1A) ON ACCOUNT OF NON DEDUCTION OF TAX A T SOURCE IN THE NAME OF TRANFERROR BY NOT ACCEPTING THE CLAIM OF AS SESSEE THAT TAX IS DEDUCTED AT SOURCE IN THE NAME OF POWER OF ATTORNEY HOLDER WHO EXECUTED THE SALE DEED BY PROVIDING HIS PAN AND ALS O RECEIVED THE PAYMENT. 2 ITA NO.291/JODH/2018 M/S. OXCIA ENTERPRISES PVT.LTD ., AY 2016-17 2. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN N OT APPRECIATING THE FACT THAT ON SAME TRANSACTION TAX AT SOURCE CANNOT BE DEDUCTED TWICE AND, THEREFORE, THE DEMAND RAISED U/S. 201(1)/201(1 A) IS BAD IN LAW. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THE CLAIM OF ASSESSEE THAT IN CASE TAX IS TO BE DEDUCTE D IN HANDS OF OWNER OF PROPERTY, THEN SALE CONSIDERATION BEING LESS THAN R S.50 LACS IN THE HAND OF EACH OWNER, THERE IS NO LIABILITY TO DEDUCT TAX AT SOURCE U/S. 194IA OF THE ACT. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE DCIT, RANGE TDS RAISIN G DEMAND OF RS.14,30,856/- U/S.201(1)/201(1A) OF THE INCOME-TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT) ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY PURCHASED RESIDENTIAL PROPERTY FOR A CONSIDERATION OF RS.60,12,000/- ON 2 8.05.2015. THE PROPERTY PURCHASED WAS OWNED BY SHRI ANANT RAM KUMAWAT AND S MT. SEEMA KUMAWAT (HEREINAFTER REFERRED TO AS THE JOINT OWNERS). TH E SALE WAS EXECUTED ON BEHALF OF THE JOINT OWNERS BY SHRI VIJAY KUMAWAT WHO HELD POW ER OF ATTORNEY OF THE JOINT OWNERS OF THE PROPERTY TO ACT ON THEIR BEHALF IN RE LATION TO THE PROPERTY WHICH WAS SOLD TO THE ASSESSEE. THOUGH THE ASSESSEE COMPANY DEDUCTED TDS @ 1% OF THE SALE CONSIDERATION BY QUOTING THE PAN OF SHRI VIJAY KUMA WAT, WHO WAS NOT THE ACTUAL OWNER OF THE PROPERTY AND THE OWNERS OF THE PROPERT Y ARE SHRI ANANT RAM KUMAWAT AND SMT. SEEMA KUMAWAT. ACCORDING TO HIM, TDS SHOU LD HAVE BEEN DEDUCTED IN THE NAME OF THE ACTUAL OWNERS AND NOT IN THE NAME OF TH E POWER OF ATTORNEY HOLDER. AO ALSO FOUND FAULT WITH THE ASSESSEE NOT MENTIONIN G THE PAN DETAILS OF THE JOINT OWNERS SO AO WAS OF THE VIEW THAT THE PROVISIONS OF SEC. 206AA OF THE ACT WERE APPLICABLE AND TAX WAS DEDUCTIBLE AT SOURCE @ 20% O F THE PURCHASE CONSIDERATION OF RS.60,12,000/- AND, THEREFORE, THE AO AFTER HEARING THE ASSESSEE CONCLUDED THAT TDS WAS DEDUCTIBLE AT 20% OF RS.60,12,000/- AND ACCORDI NGLY CREATED A DEMAND OF RS.12,02,400/- U/S. 201(1) AND INTEREST U/S.201(1A) OF THE ACT OF RS.2,28,456/- TOTALING RS.14,30,856/-. AGGRIEVED, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE LD. 3 ITA NO.291/JODH/2018 M/S. OXCIA ENTERPRISES PVT.LTD ., AY 2016-17 CIT(A), WHO WAS PLEASED TO CONFIRM THE ACTION OF TH E AO(TDS). AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ADMITT ED FACTS ARE THAT THE ASSESSEE HAS PURCHASED THE PROPERTY AS PER SALE DEED DATED 2 8.05.2015 FROM SHRI VIJAY KUMAWAT, A POWER OF ATTORNEY HOLDER (POA) OF THE JO INT OWNERS OF THE PROPERTY SHRI ANANT RAM KUMAWAT AND SMT. SEEMA KUMAWAT. IN THE S ALE DEED ONLY THE PAN OF THE ATTORNEY HOLDER SHRI VIJAY KUMAWAT HAS BEEN MEN TIONED. 1% TDS HAS BEEN DEDUCTED ON THE SALE CONSIDERATION AND DEPOSITED IN THE GOVERNMENT TREASURY WITH INTEREST. THE SALE CONSIDERATION HAVE BEEN GIVEN B Y CHEQUE, DETAILS OF WHICH HAVE ALREADY BEEN GIVEN IN THE IMPUGNED ORDER. THE TOTA L SALE CONSIDERATION IS RS.60,12,000/-. WE NOTE THAT SHRI VIJAY KUMAWAT BY VIRTUE OF HAVING THE POWER OF ATTORNEY TO TRANSFER THE LAND/IMMOVABLE PROPERTY HA S TRANSFERRED IT ON BEHALF OF THE JOINT OWNERS SHRI ANANT RAM KUMAWAT AND SMT. SEEMA KUMAWAT. WE NOTE THAT THE LD. AR OF THE ASSESSEE BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT SHRI VIJAY KUMAWAT (POA) IS THE SON OF SHRI ANANT RAM KUMAWAT (OWNER) AND BROTHER OF SMT. SEEMA KUMAWAT (OWNER) AND THE SAID SHRI VIJAY KUMAW AT (POA) HAS GIVEN HIS PAN DETAILS AND THE ENTIRE SALE CONSIDERATION HAS BEEN RECEIVED THROUGH BANKING CHANNEL OF SHRI VIJAY KUMAWATS ACCOUNT. THOUGH IN THE EYE S OF LAW SHRI VIJAY KUMAWAT (POA) AS NO TITLE TO THE PROPERTY IN QUESTION HE HA S BEEN AUTHORIZED BY THE CO- OWNERS OF THE IMMOVABLE PROPERTY IN QUESTION TO TRA NSFER THE JOINTLY HEL;D IMMOVABLE PROPERTY AND, THEREFORE, IN LAW SHRI VIJA Y KUMAWAT (POA) IS AN AGENT ACTING UNDER A POWER OF ATTORNEY THE AUTHORITY WHIC H IS DEFINED AND LIMITED BY THE STATUTORY LAWS OF POWER OF ATTORNEY ACT. THE EXTEN T OF THE POWER OF TRANSFER DEPENDS UPON THE INTEREST OF THE TRANSFEROR OR THE LIMITATION UPON HIS AUTHORITY GIVEN BY THE DONOR SHRI VIJAY KUMAWAT, IS ONLY THE POWER OF ATTORNEY HOLDER OF THE CO-OWNERS OF THE JOINTLY HELD IMMOVABLE PROPERTY AN D CANNOT BE TERMED AS THE TRANSFEROR OF THE IMMOVABLE PROPERTY BECAUSE SHRI V IJAY KUMAWAT ONLY HAS THE 4 ITA NO.291/JODH/2018 M/S. OXCIA ENTERPRISES PVT.LTD ., AY 2016-17 POWER OR AUTHORITY TO TRANSFER THE PROPERTY IN QUE STION AND NOT THE OWNERSHIP ENJOYED BY THE CO-OWNERS IN THE JOINTLY HELD IMMOVA BLE PROPERTY, SO SHRI VIJAY KUMAWAT (POA) CANNOT BE TERMED THE TRANSFEROR OF TH E IMMOVABLE PROPERTY. HERE IN THIS CASE, THE TRANSFER OF THE IMMOVABLE PROPERT Y IS UNDISPUTED, THE ONLY ISSUE IS THAT THE ASSESSEE BEING THE BUYER/TRANSFEREE HAS NO T DEDUCTED THE TDS @ 1% FROM THE TRANSFEROR OF THE PROPERTY I.E. FROM THE JOINT OWNERS OF THE PROPERTY, THAT TOO WITHOUT COLLECTING THEIR PAN DETAILS. THOUGH, WE N OTE THAT THE TDS HAS BEEN DEDUCTED IN THE HANDS OF THE POWER OF ATTORNEY HOLD ER SHRI VIJAY KUMAWAT WHO IS THE SON/BROTHER OF THE JOINT OWNERS RESPECTIVELY. A T THIS JUNCTURE, WE FIND FORCE IN THE GROUND NO. 3 OF THE APPEAL OF THE ASSESSEE. WE NOTE THAT SINCE THE JOINT OWNERS CONSIDERATION FOR THE ENTIRE PROPERTY IS RS .60,12,000/- INDIVIDUALLY THEY WILL GET RS. 30,06,000/- EACH WHICH IS BELOW THE TAXABLE LIMIT WHICH SECTION 194-IA PRESCRIBES. SECTION 194-IA OF THE ACT IS REPRODUCE D AS UNDER: (1) ANY PERSON, BEING A TRANSFEREE, RESPONSIBLE FOR PAYING (OTHER THAN THE PERSON REFERRED TO IN SECTION 194LA) TO A RESIDENT TRANSFE ROR ANY SUM BY WAY OF CONSIDERATION FOR TRANSFER OF ANY IMMOVABLE PROPERTY (OTHER THAN AGRICULTURAL LAND), SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE TRANSFE ROR OR AT THE TIME OF PAYMENT OF SUCH SUM IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME-TAX THEREON. (2) NO DEDUCTION UNDER SUB-SECTION (1) SHALL BE MADE WH ERE THE CONSIDERATION FOR THE TRANSFER OF AN IMMOVABLE PROPERTY IS LESS THAN FIFT Y LAKH RUPEES.( EMPHASIS GIVEN BY US ) (3) THE PROVISIONS OF SECTION 203A SHALL NOT APPLY TO A PERSON REQUIRED TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION. EXPLANATION FOR THE PURPOSES OF THIS SECTION, (A) AGRICULTURAL LAND MEANS AGRICULTURAL LAND IN INDIA, NOT BEING A LAND SITUATE IN ANY AREA REFERRED TO IN ITEMS (A) AND (B) OF SUB-CL AUSE (III) OF CLAUSE (14) OF SECTION 2; (B) IMMOVABLE PROPERTY MEANS ANY LAND (OTHER THAN AGRICULTURAL LAND) OR ANY BUILDING OR PART OF A BUILDING. 5. SO, EVEN THOUGH THE ADMITTED POSITION IS THAT TH E ASSESSEE BUYER/TRANSFEREE HAS NOT DEDUCTED TAX IN THE HANDS OF THE JOINT OWNE RS OF THE PROPERTY, STILL WE NOTE THAT SUB-SECTION(2) OF SEC. 194-IA OF THE ACT PROVI DES AN EXCEPTION FROM DEDUCTING TAX OF 1% OF THE SALE CONSIDERATION, WHEN THE SALE CONSIDERATION FOR THE TRANSFER OF 5 ITA NO.291/JODH/2018 M/S. OXCIA ENTERPRISES PVT.LTD ., AY 2016-17 AN IMMOVABLE PROPERTY IS LESS THAN RS. 50 LACS. TH EREFORE, IN THE INSTANT CASE, WE NOTE THAT THE TOTAL SALE CONSIDERATION IS ONLY RS.6 0,12,000/- AND THE ADMITTED FACT AS TAKEN NOTE BY AO & LD. CIT(A) IS THAT SHRI ANANT RAM KUMAWAT AND SMT. SEEMA KUMAWAT ARE THE CO-OWNERS, AND JOINTLY OWNING THE I MMOVABLE PROPERTY. SO, THE SALE CONSIDERATION HAS TO BE DIVIDED EQUALLY INTO T WO BY VIRTUE OF SEC. 46 OF THE TRANSFER OF PROPERTY ACT WHICH PRESCRIBED THAT WHER E IMMOVABLE PROPERTY IS TRANSFERRED FOR A CONSIDERATION BY PERSONS HAVING D ISTINCT INTEREST THEREIN, THE TRANSFERORS ARE, IN THE ABSENCE OF A CONTRACT TO TH E CONTRARY, ENTITLED TO SHARE IN THE CONSIDERATION EQUALLY. SO, IN THIS CASE, SINCE THER E IS NO CONTRACT TO THE CONTRARY COULD BE POINTED OUT BY THE LD. DR FOR REVENUE, IN THIS CASE CONSIDERATION FOR EACH TRANSFEROR COMES TO RS.30,06,000/- EACH, WHICH IS B ELOW THE PRESCRIBED LIMIT OF RS.50 LACS GIVEN BY THE STATUTE AS AFORESAID AND, T HEREFORE, IN THE LIGHT OF THE SAME, WE ARE OF THE OPINION IN THE FACTS AS DISCUSSED, SU PRA, THAT THE PROVISIONS OF SEC. 194- IA OF THE ACT ARE NOT APPLICABLE IN THE INSTANT CAS E AND, THEREFORE, PROVISIONS OF SECTION 194-IA OF THE ACT ARE NOT ATTRACTED. IN AN Y CASE, WE NOTE THAT WHEN THE DEPARTMENT WAS KNOWING THE PAN DETAILS OF THE POWER OF ATTORNEY HOLDER SHRI VIJAY KUMAWAT WHO WAS NONE OTHER THAN THE SON AND BROTHER OF THE JOINT OWNERS SHRI ANANT RAM KUMAWAT AND SMT. SEEMA KUMAWAT RESPECTIVE LY, THE AO COULD HAVE EASILY FOUND OUT WHETHER THESE CO-OWNERS HAVE REFLE CTED THE SALE CONSIDERATION AS DISCUSSED ABOVE IN THEIR RESPECTIVE RETURN OF INCOM E, IF HE HAD MADE SOME ENQUIRY OR REFERRED THE CASE TO THE AO WHO HAS JURISDICTION OVER THE POA HOLDER SHRI VIJAY KUMAWAT, (WHO HAD OBTAINED THE ENTIRE SALE CONSIDER ATION IN HIS BANK ACCOUNT OR AS TO WHETHER POA HAS SHOWN IT AS HIS CAPITAL GAIN OR NOT). THEN ONLY PICTURE WOULD BE CLEAR AND THE APPREHENSION OF INCOME/GAIN ESCAPING FROM THE HANDS OF CO-OWNERS COULD HAVE BEEN EASILY ADDRESSED RATHER THAN FINDIN G FAULT WITH THE ASSESSEES OMISSION OF NOT DOING DUE DILIGENCE TO TRACK DOWN T HE PAN DETAILS OF THE CO-OWNERS OF THE IMMOVABLE PROPERTY AND IN ANY CASE THE DEPAR TMENT IS NOW ALSO EMPOWERED TO FIND OUT THE REALITY OF THE FACTS DISCUSSED ABOV E IF THE STATUTE PERMITS AND IN ACCORDANCE TO LAW. 6 ITA NO.291/JODH/2018 M/S. OXCIA ENTERPRISES PVT.LTD ., AY 2016-17 6. THEREFORE, IN THE LIGHT OF THE DISCUSSION ABOVE , WE ARE OF THE CONSIDERED OPINION THAT IN THIS CASE, SEC. 194-IA OF THE ACT I S NOT APPLICABLE AND WE FIND FORCE IN THE GROUND NO. 3 OF THE ASSESSEES APPEAL WHICH IS HEREBY ALLOWED AND ADDITION IS DIRECTED TO BE DELETED AND, THEREFORE, GROUND NOS. 1 AND 2 HAS BECOME ACADEMIC IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. THE APP EAL OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2019 SD/- SD/- (N.K. SAINI) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 06.05.2019 J.D. SR. PS. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. % , '% , * / DR, ITAT, JODHPUR 6. - / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR