Shiv Shakti Builders, Meerut V. ITO, (TDS), Meerut

ITA 3921/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2472 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V.K. GOEL
• Keywords: TDS; Set aside
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS. 3920 & 3921/DEL/2018 ASSESSMENT YEAR: 2015-16 & 2016-17 SHIV SHAKTI BUILDERS & DEVELOPERS, 97/1, PUNJABI PURA, DELHI ROAD, MEERUT, UTTAR PRADESH. PAN NO. ABQFS7454M VS ITO (TDS) MEERUT, UTTAR PRADESH. APPELLANT RESPONDENT ASSESSEE BY SHRI V.K. GOEL, ADV. REVENUE BY SHRI S.L. ANURAGI, SR. DR ORDER ITA NO. 3920/DEL/2018 FILED BY THE ASSESSEE IS DIRE CTED AGAINST THE ORDER DATED 16.04.2018 OF THE CIT(APPEA LS), MEERUT RELATING TO AY 2015-16. ITA NO. 3921/DEL/2018 FILE D BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 13.03. 2018 OF THE CIT(APPEALS), MEERUT RELATING TO F.Y. 2015-16 I.E. AY 2016-17. SINCE, COMMON ISSUES ARE INVOLVED IN BOTH THESE APP EALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. DATE OF HEARING 09.05.2019 DATE OF PRONOUNCEMENT 20.06.2019 2 ITA NOS . 3920 & 3921/DEL/2018 ITA NO. 3920/DEL/2018 (FY 2014-15) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF LAND, CONSTRUC TION AND SALE OF FLATS ETC. DURING THE COURSE OF TDS VERIFICATIO N THE AO OBSERVED FROM THE BALANCE SHEET AS ON 31.03.2015 THAT THE AS SESSEE HAS MADE AN ADVANCE PAYMENT OF RS. 61,00,000/- TO SHRI VIJAY KUMAR GHAI FOR PURCHASE OF LAND. HE OBSERVED THAT THE AS SESSEE PURCHASED 3 PLOTS MEASURING 190.15 SQ. MT., 230.45 SQ MT. AND 230.45 SQ. MT. DURING FY 2015-16 THAT WERE REGISTER ED ON 05.08.2015, 16.06.2015 AND 15.06.2015 RESPECTIVELY. AS PER THE REGISTRATION DEEDS THAT HAVE BEEN EXECUTED, ALL THE SE PLOTS BEAR THE SAME ADDRESS I.E., VACANT PART OF PROPERTY NO. 98, KHASRA NUMBER 1922 AND 1924, MOHALLA PUNJABI PURA, MEERUT. ALL THESE PLOTS HAVE BEEN PURCHASED FROM THE SAME PERSON VIZ. , SHRI VIJAY KUMAR GHAI, S/O SHRI ROSHAL LAL GHAI, 369, KAMLA NA GAR, BAGPAT ROAD, MEERUT. THIS SHOWS THAT THE REGISTRY OF THE ENTIRE PROPERTY SITUATED AT MU. NO. 98, KHASRA NUMBER 1922 AND 1924 , MOHALLA PUNJABI PURA, MEERUT, WAS EXECUTED IN THREE PARTS W ITH THE SOLE INTENTION OF EVADING PAYMENT OF TDS ON THE TOTAL SA LE CONSIDERATION OF THE LAND AS PER THE PROVISIONS OF SECTION 194IA OF THE ACT, AS THE TOTAL SALE CONSIDERATION WOULD HAVE EXCEEDED RS. 50,00,000/- IF THE ENTIRE REGISTRY HAD BEEN EXECUTE D BY ONE AGREEMENT. 3. ACCORDING TO THE AO, SINCE, THE ADVANCE PAYMENT OF RS. 61 LAKHS WAS MADE IN FY 2014-15, THEREFORE, TDS @ 1% S HOULD HAVE 3 ITA NOS . 3920 & 3921/DEL/2018 BEEN DEDUCTED BY THE ASSESSEE U/S 194IA OF THE ACT FROM SUCH PAYMENT. SINCE, THE ASSESSEE DID NOT DEDUCT THE SA ME THE AO TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT. 4. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE AO. WHILE DOING SO, HE HELD THAT THE WORD USED IN THE SECTION IS A PROPERTY AND, THEREFORE, ANY NUMBER OF REGISTRIES WILL NOT S AVE THE DEDUCTOR FROM HIS LIABILITY TO DEDUCT THE TDS. HE, ACCORDIN GLY, UPHELD THE ACTION OF THE AO. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS: 1. THAT THE AO IS IN ERROR IN HOLDING THAT TDS IS PAY ABLE @ 1%, WHEN SALE DEED IS MADE BELOW RS. 50,00,000/-. HENCE, LIABILITY OF TDS ON PURCHASE OF LAND SHALL N OT BE ARISES AND CIT(A) HAS NOT JUSTIFIED IN CONFIRMING T HE SAME. 2. THAT THE ASSESSEE HAS RIGHT TO ADD, MODIFY OR DELET E ANY GROUND DURING THE APPEAL PROCEEDINGS. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ACTION OF THE AO IN TREATING THE ASSESSEE AS AN ASSESSEE IN DEFAULT. HE SUBMITT ED THAT THE ASSESSEE HAD PURCHASED THREE PLOTS ON THREE DIFFERE NT DATES ALTHOUGH FROM THE SAME PERSON. THE VALUE OF NONE O F THE PROPERTIES MENTIONED BY THE AO EXCEEDS RS. 50 LAKHS AND, THEREFORE, THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS AS PER THE PROVISIONS OF SECTION 194IA OF THE ACT. REFERRING TO THE DECISION OF THE TRIBUNAL IN THE CASE OF VINOD SONI, BABLI SONI, BEENA SONI AND PRADEEP KUMAR SONI VS. ITO(TDS), FARIDABAD HE SUBMI TTED THAT THE TRIBUNAL IN THE SAID DECISION HAD SET ASIDE THE ORDER OF THE 4 ITA NOS . 3920 & 3921/DEL/2018 CIT(A), WHEREIN THE CIT(A) HAD CONFIRMED THE ACTION OF THE AO IN TREATING THE FOUR ASSESSEES AS DEFAULTER U/S 201(1) OF THE ACT ON THE GROUND THAT THEY JOINTLY PURCHASED A PROPERTY T HE VALUE OF WHICH WAS 1,50,00,000/- ALTHOUGH 1/4 TH SHARE OF EACH PURCHASER WAS LESS THAN 50 LAKHS. HE SUBMITTED THAT SINCE TH E PROPERTIES IN THE INSTANT CASE WERE PURCHASED ON 3 DIFFERENT DATE S AND THE VALUE OF EACH PROPERTY IS LESS THAN 50 LAKHS, THEREFORE, ASSESSEE IS NOT LIABLE TO DEDUCT TDS U/S 194IA OF THE ACT. 7. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTE D THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE BUYER AND SEL LER IN THE INSTANT CASE ARE ONE AND THE PROPERTY ALSO BEARS TH E SAME KHASRA NUMBER BUT THE SALE DEEDS ARE EXECUTED IN THREE PAR TS. HE SUBMITTED THAT THE ASSESSEE JUST TO AVOID THE PAYME NT OF TDS ON THE TOTAL SALE CONSIDERATION OF THE LAND AS PER THE PROVISIONS OF SECTION 194IA HAD EXECUTED THE SALE DEEDS IN THREE PARTS. HE, ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE BE DISMISSED. 8. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I FIND THE ASSESSEE IN THE INSTANT CASE PURCHASED THREE PLOTS MEASURING 190.15 SQ. MT., 230.45 SQ. MT. AND 230.45 SQ. MT. D URING FY 2015-16 WHICH WERE REGISTERED ON 05.08.2015, 16.06. 2015 AND 15.06.2015 RESPECTIVELY. THE VALUE OF EACH PLOT WA S RS. 44 LAKHS. I FIND THE AO HELD THAT SINCE ALL THESE PLOTS BEAR THE SAME ADDRESS AND ALL THESE HAVE BEEN PURCHASED FROM THE SAME PER SON BY THE 5 ITA NOS . 3920 & 3921/DEL/2018 ASSESSEE, THEREFORE, THE ASSESSEE IS LIABLE TO DEDU CT TDS @ 1% FROM SUCH PAYMENT AS PER THE PROVISIONS OF SECTION 194IA OF THE ACT SINCE, THE COMBINED VALUE OF THE PROPERTIES EXC EEDS RS. 50 LAKHS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE PROPERTIES ARE REGISTERED ON THREE D IFFERENT DATES AND THE AREA OF EACH PLOT IS DIFFERENT, THEREFORE, ASSESSEE IS NOT LIABLE TO DEDUCT TDS @ 1% AS PER THE PROVISIONS OF SECTION 194IA OF THE ACT. 9. THE PROVISIONS OF SECTION 194IA READS AS UNDER: 194IA. (1) ANY PERSON, BEING A TRANSFEREE, RESPONSIBLE FOR PAYING (OTHER THAN THE PERSON REFERRED TO IN SE CTION 194LA) TO A RESIDENT TRANSFEROR ANY AGRICULTURAL LA ND), SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE TRANSFEROR 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 MA DE WHERE THE CONSIDERATION FOR THE TRANSFER OF AN IMMO VABLE PROPERTY IS LESS THAN FIFTY LAKH RUPEES. (3) THE PROVISIONS OF SECTION 203A SHALL NOT APPLY TO A PERSON REQUIRED TO DEDUCT TAX IN ACCORDANCE WITH TH E PROVISIONS OF THIS SECTION. EXPLANATION. FOR THE PURPOSES OF THIS SECTION, - A) AGRICULTURAL LAND MEANS AGRICULTURAL LAND IN INDI A, NOT BEING A LAND SITUATE IN ANY AREA REFERRED TO IN ITEMS (A) AND (B) OF SUB-CLAUSE (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. 6 ITA NOS . 3920 & 3921/DEL/2018 10. AS PER SUB-SECTION (2) OF SECTION 194IA NO DEDU CTION UNDER SUB-SECTION (1) SHALL BE MADE WHERE THE CONSIDERATI ON FOR THE TRANSFER OF AN IMMOVABLE PROPERTY IS LESS THAN RS. 50 LAKHS. I FIND, THE ASSESSEE IN INSTANT CASE HAD PURCHASED TH REE PROPERTIES ON THREE DIFFERENT DATES, ALTHOUGH, THEY BEAR THE S AME KHASRA NUMBER AND THE SELLER IS THE SAME. THIS INDICATES THAT THE ASSESSEE HAD PURCHASED THE LAND ON PIECE MEAL BASIS . IN MY OPINION, SINCE, THE VALUE MENTIONED IN EACH SALE DE ED IS LESS THAN RS. 50 LAKHS, THEREFORE, THE PROVISIONS OF SECTION 194IA WILL NOT BE APPLICABLE TO THE ASSESSEE. MERELY BECAUSE, THE SE LLER IS THE SAME AND THE KHASRA NUMBER OF THE THREE PROPERTIES PURCH ASED BY THE ASSESSEE ARE SAME, THE SAME CANNOT BE A GROUND TO T REAT THE ASSESSEE AS AN ASSESSEE IN DEFAULT WHEN THE VALUE M ENTIONED IN EACH SALE DEED EXECUTED ON 3 DIFFERENT DATES IS LES S THAN RS. 50 LAKHS. I, THEREFORE, SET ASIDE THE ORDER OF THE CI T(A) AND DIRECT THE AO NOT TO TREAT THE ASSESSEE AS AN ASSESSEE IN DEFA ULT. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWE D. ITA NO. 3921/DEL/2018 (FY 2015-16) : 11. GROUND NO. 1 BY THE ASSESSEE READS AS UNDER: 1. THAT THE AO IS IN ERROR ON THE ISSUE OF LABOUR PAY MENT OF RS. 13,55,585/- IS SUBJECT TO TDS, IF PAYMENT MA DE BY THE ASSESSEE TO LABOUR IS BELOW RS. 20,000/- AND CIT(A) HAS NOT JUSTIFIED IN CONFIRMING THE SAME. 12. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DU RING THE COURSE OF TDS ASSESSMENT OBSERVED THAT ASSESSEE FAILED TO DEDUCT TDS ON LABOUR PAYMENT TO THE TUNE OF RS. 13,55,585/- DURIN G THE FY 7 ITA NOS . 3920 & 3921/DEL/2018 2015-16. ON BEING QUESTIONED BY THE AO, IT WAS SUB MITTED THAT OUT OF THE TOTAL LABOUR EXPENSES OF RS. 27,07,195/- , TDS HAS BEEN DEDUCTED ON THE AMOUNT OF LABOUR WORTH RS. 13,51,61 0/- U/S 194C OF THE ACT. ON THE BALANCE AMOUNT, ASSESSEE I S NOT LIABLE TO DEDUCT TDS. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. RELYING ON THE PROVISIONS OF SECTION 194C THE AO HELD THAT THE ASSESSEE WAS LIAB LE TO DEDUCT TDS @ 2% FROM THE LABOUR PAYMENT OF RS. 13,55,585/- . HE, ACCORDINGLY, TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT FOR NON DEDUCTION OF TAX. 13. IN APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO IN ABSENCE OF FILING OF ANY DETAILS OR COPY OF ACCOUNT S TO JUSTIFY THAT ASSESSEE HAS NOT PAID ANY AMOUNT EXCEEDING RS. 20,0 00/- IN A SINGLE DAY TO ANY PERSON. 14. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE AS SESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 15. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I FIND OUT OF THE TOTAL LABOUR PAYMENT OF RS. 27,07,195/- THE ASSESSE E HAD NOT DEDUCTED TDS ON AN AMOUNT OF RS. 13,55,585/- FOR WH ICH THE AO HELD THE ASSESSEE AS AN ASSESSEE IN DEFAULT. SINCE , THE ASSESSEE COULD NOT SUBSTANTIATE WITH EVIDENCE BEFORE THE CIT (A) THAT NO PAYMENT HAS BEEN MADE EXCEEDING RS. 20,000/- TO ANY PERSON IN A SINGLE DAY, HE UPHELD THE ACTION OF THE AO. IT I S THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN O PPORTUNITY HE 8 ITA NOS . 3920 & 3921/DEL/2018 WILL PRODUCE THE DETAILS EITHER BEFORE THE AO OR BE FORE THE CIT(A) AS THE CASE MAY BE TO SUBSTANTIATE THAT NO PAYMENT EXC EEDING RS. 20,000/- HAS BEEN PAID TO ANY PERSON IN A SINGLE DA Y AND THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS FROM SUCH LABO UR PAYMENT. 16. CONSIDERING THE TOTALITY OF THE FACTS OF THE CA SE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE TH E ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNIT Y TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO HIS SATIS FACTION THAT ASSESSEE IS NOT LIABLE TO DEDUCT TAX @ 2% ON THE AM OUNT OF RS. 13,55,585/- BEING THE LABOUR PAYMENT. THE AO SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDING LY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR S TATISTICAL PURPOSES. 17. GROUND NO. 2 READS AS UNDER: 2. THE THE AO IS IN ERROR IN HOLDING THAT TDS IS PAYABLE @ 1%, WHEN SALE DEED IS MADE BELOW RS. 50 LAKHS. HEN CE, LIABILITY OF TDS ON PURCHASE OF LAND SHALL NOT BE A RISES AND CIT(A) HAS NOT JUSTIFIED IN CONFIRMING THE SAME. 18. AFTER HEARING BOTH THE SIDES, I FIND THE ABOVE GROUND IS IDENTICAL TO GROUND NO. 1 IN ITA NO. 3920/DEL/2018. I HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE ASSESSEE HAS BEEN BEING ALLOWED. FOLLOWING SIMILAR REASONIN G, THE ABOVE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 9 ITA NOS . 3920 & 3921/DEL/2018 19. IN THE RESULT, ITA NO. 3920/DEL/2018 IS ALLOWED AND ITA NO. 3921/DEL/2018 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20/06/2019 SD/- (R.K. PA NDA) ACCOUNTANT MEMBER DATED: 20/06/2019 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 18.6.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 18.6.2019/ 19.6.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 20.6.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 20.6.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 20.6.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 20.6.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.6 .2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 10 ITA NOS . 3920 & 3921/DEL/2018