The Income-tax Officer, Jammu V. Sh. Sham Lal, C/o. Jyoti Tyres, Jammu

ITA 741/ASR/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1449 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGHDR
• Assessee Lawyers: ARUN GUPTA
• Keywords: Search and seizure; Fair market value
• Section: 206AA; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR [JAMMU CAMP, JAMMU] BEFORE HONBLE SHRI A.D.JAIN, JUDICIAL MEMBER, AND HONBLE SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A. NO 741(ASR)/2014 ASSESSMENT YEAR:2014-15 THE I.T.O, TDS CIRCLE JAMMU. VS. SHRI SHAM LAL , C/O JYOTI TYRES 270-B, JEEVAN NAGAR JAMMU PAN: AAOPL 2884 R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.K. SINGH(DR.) RESPONDENT BY: SHRI ARUN GUPTA (CA) DATE OF HEARING: 02.12.2015 DATE OF PRONOUNCEM ENT: 10 .12 .2015 ORDER PER A.D. JAIN, JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER OF THE CIT(A), JAMMU, DATED 29.09.2014 FOR THE ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS: 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS), HAS ERRED IN LAW AND IN FACTS IN DELETING THE DEMAND OF RS. 25,53,370/- RAISED U/S 201(1) AND INTEREST U/S 201( 1A) ON THE GROUND THAT THE TDS WAS REQUIRED TO BE MADE ON THE SALE CONSIDERATION BASIS NOT ON STAMP VALUE OF PROPERTY. ITA NO.741(ASR)/2014 2 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASS ESSEE, ALONGWITH ANOTHER PERSON, NAMELY, MR. MULK RAJ [BUYERS] JOINT LY PURCHASED A PIECE OF LAND FOR A TOTAL CONSIDERATION OF RS. 16.75 LAKH S FROM A GROUP OF 7 PERSONS. ACCORDING TO THE AO, INFORMATION WAS RECE IVED FROM THE SUB- REGISTRAR, JAMMU THAT THE PERSONS RECEIVING THE AMO UNT OF RS. 1,23,95,000/- HAVE NOT FURNISHED THEIR PAN OF THE PERSON RESPONSIBLE FOR DEDUCTING SUCH TAX. THE AO OBSERVED THAT AS PER SECTION 206AA OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS T HE ACT, FOR SHORT] THE DEDUCTOR HAD TO OBTAIN PAN OF THE DEDUCTEE AT THE T IME OF PAYMENT FAILING WHICH TAX HAD TO BE DEDUCTED BY THE DEDUCTO R @ 20%. HE FURTHER OBSERVED THAT IN THE INSTANT CASE, NEITHER THE PERS ON RESPONSIBLE HAD DEDUCTED TAX U/S 194IA OF THE ACT NOR OBTAINED PAN OF THE SELLER AT THE TIME OF MAKING PAYMENT. ACCORDING TO THE AO, AS PE R PROVISIONS OF SECTION 30(2A) OF THE ACT, THE PERSON RESPONSIBLE W ERE REQUIRED TO DEDUCT TAX AND DEPOSIT THE SAME TO THE CREDIT OF THE CENTR AL GOVERNMENT ACCOUNT WITHIN A PERIOD OF SEVEN DAYS FROM THE END OF THE MONTH. THEREFORE, THE AO CAME TO THE CONCLUSION THAT THE A SSESSEE, AS PERSON RESPONSIBLE, WAS IN DEFAULT OF TDS AND CHARGED THE TAX DEDUCTIBLE U/S 194IA OF THE ACT AND APPLIED THE PROVISIONS OF SECT ION 201(1) OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE AND INTEREST THE REOF U/S 201(1A) ON THE PAYMENT MADE. ACCORDINGLY, THE AO WORKED OUT T HE DEMAND OF RS. 25,53,370/- AND ADDED THE SAME IN THE HANDS OF THE ASSESSEE. ITA NO.741(ASR)/2014 3 3. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE TH E LD. CIT(A), WHO DELETED THE ADDITION BY HOLDING THAT THE TDS WAS R EQUIRED TO BE DEDUCTED ON THE ACTUAL SALE CONSIDERATION PAID. TH E LD. CIT(A) HELD THAT THE ACTUAL CONSIDERATION BEING LESS THAN RS. 50 LAK HS, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON THE CONSIDERATION PAI D FOR PURCHASE OF IMMOVABLE PROPERTY. 4. CHALLENGING THE ORDER OF THE LD. CIT(A), THE DE PARTMENT IN NOW IS APPEAL BEFORE THE TRIBUNAL. 5. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO AND CONTENDED THAT THE LD. CIT(A) WAS NOT RIGHT IN DELE TING THE DEMAND OF RS. 25,53,370/-, WRONGLY BRUSHING ASIDE THE AOS CATEGO RICAL FINDING IN THE REMAND REPORT, THAT AS PER THE PROVISIONS OF THE I NCOME TAX ACT, THE VALUE ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP D UTY SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION AS A RESU LT OF SUCH TRANSFER AND THAT THE PLEA OF THE PERSON RESPONSIBLE THAT THE CIRCLE RATE DOES NOT HAVE ANY DIRECT RELATIONSHIP WITH THE ACTUAL CONSIDERATI ON IS LEGALLY INCORRECT, AS IT WOULD DEFEAT THE VERY LEGISLATIVE INTENT OF I NTRODUCING THE PROVISIONS OF SECTION 194IA OF THE ACT. 6. ON THE OTHER HAND, THE LD. AR RELIED ON THE ORDE R OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE HIM. HE CONTENDED THAT THE ACTUAL SALE CONSIDERATION OF THE PROPERTY WAS RS. 5 LAKHS PER KANAL, AS ITA NO.741(ASR)/2014 4 PER THE SALE DEED, BUT THE SAME HAD BEEN IGNORED AN D THE GOVERNMENT NOTIFIED MARKET VALUE RATE OF RS. 37 LAKHS HAD BEEN WRONGLY CONSIDERED BY THE AO., WHICH POSITION HAS BEEN SET RIGHT BY CO RRECTLY HOLDING THAT THE PROVISIONS OF SECTION 1941A OF THE ACT HAVE NO APPLICABILITY WHERE THE SALE CONSIDERATION IS LESS THAN RS. 50 LAKHS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE RELEVANT MATERIAL ON RECORD. WE FIND MERIT IN THE ARGUMENTS OF THE LD. AR THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITIO N. THE LD. CIT(A) HAS RIGHTLY HELD THAT TDS WAS REQUIRED TO BE DEDUCTED ON THE ACTUAL SALE CONSIDERATION PAID. THE LD. CIT(A) HELD THAT THE A CTUAL CONSIDERATION BEING LESS THAN RS. 50 LAKHS, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON THE CONSIDERATION PAID FOR PURCHASE OF IMMOV ABLE PROPERTY. THE AO, WHILE ISSUING THE ORDER U/S 201 OF THE ACT, HAS NOT BROUGHT ANY MATERIAL ON RECORD WHICH WOULD FACTUALLY AND UNAMB IGUOUSLY EVIDENCE THE ACTUAL SALE CONSIDERATION AT RS. 123.95 LAKHS, AND NOT AT RS. 16.75 LAKHS NOR HAS HE CONDUCTED ANY ENQUIRIES WHICH COUL D LEAD TO THE CONCLUSION THAT THE ACTUAL SALE CONSIDERATION WAS M ORE THAN RS. 50 LAKHS, THEREBY TO HOLD THE ASSESSEE AS THE DEDUCTOR , OR PERSON RESPONSIBLE IN DEFAULT. THE ORDER OF THE AO IS BAS ED ON INCORRECT INTERPRETATION/APPLICATION OF THE LAW AND THUS NOT SUSTAINABLE. IN THE REMAND REPORT, THE AO DID NOT DENY THAT THE ACTUAL SALE CONSIDERATION WAS LESS THAN THE VALUE ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP ITA NO.741(ASR)/2014 5 DUTY, BUT HE INSISTED, WITHOUT POINTING OUT THE SPE CIFIC PROVISION OF LAW ON WHICH SUCH INSISTENCE WAS BASED, THAT THE FULL VALUE ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IS TO BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. THE LD. CIT(A), ON THE OTHER HA ND, CORRECTLY HELD THAT THE PURCHASER MAKING THE PAYMENT IS RESPONSIBLE FOR TDS, IF THE CONSIDERATION EXCEEDS FIFTY LAKH RUPEES. SECTION 19 4IA(2) OF THE ACT IS EXPLICIT IN THIS REGARD, SINCE IT STATES THAT : 194A(2):NO DEDUCTION UNDER SUB-SECTION (1) SHALL B E MADE WHERE THE CONSIDERATION FOR THE TRANSFER OF AN IMMOVABLE PROPERTY IS LESS THAN FIFTY LAKH RUPEES. 8. THE DEPARTMENT HAS ALSO NOT BEEN ABLE TO CONTROV ERT THE CIT(A)S FINDING THAT THE VALUE DETERMINED FOR THE PURPOSE O F VALUATION OF STAMP DUTY, AT THE RATE NOTIFIED BY THE GOVERNMENT, I.E., THE FAIR MARKET VALUE RATE, WHICH NEEDS TO BE CONSIDERED ONLY FOR THE P URPOSE OF CHARGE OF STAMP DUTY ON TRANSFER OF PROPERTY, SHALL NEITHER B E CREDITED, NOR PAID BY THE PURCHASER, AND THAT IT IS ONLY THE ACTUAL SALE CONSIDERATION [ IN THIS CASE RS.16.75 LAKHS, WHICH IS LESS THAN THE AMOUN T OF RS. 50 LAKHS, AS LAID DOWN IN SECTION 194IA(2) OF THE ACT] WHICH WIL L EITHER BE CREDITED IN THE BOOKS, OR PAID BY THE PURCHASER. 9. FURTHER, WE ARE AFRAID, THE DEPARTMENT IS ALSO INCORRECT IN SUPPORTING THE AOS ILL-FOUNDED OBSERVATION THAT TH E ASSESSEES PLEA THAT THE CIRCLE RATE DOES NOT HAVE ANY DIRECT RELATION W ITH THE ACTUAL CONSIDERATION, IF ACCEPTED, WOULD DEFEAT THE LEGISL ATIVE INTENT OF BRINGING IN SECTION 194IA. THIS IS SO, BECAUSE IN THE FACE O F THE CLEAR AND UNAMBIGUOUS WORDS EMPLOYED IN THE SECTION, THERE IS NO ROOM FOR GOING BEHIND THE PROVISION PER SE, TO LOOK FOR THE LEGISL ATIVE INTENT BEHIND IT. ITA NO.741(ASR)/2014 6 BESIDES, SUCH OBSERVATION OF THE AO IS A WHOLLY MIS CONCEIVED AND BASELESS OFF THE CUFF REMARK, SANS ANY LEGAL BACKIN G WHATSOEVER. 10. THEREFORE, THE ORDER OF THE LD. CIT(A) IS QUITE JUSTIFIED AND FINDING NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WE UPH OLD THE SAME. ACCORDINGLY, WE DISMISS THE GROUND OF APPEAL RAISED BY THE DEPARTMENT. 11. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10TH D ECEMBER, 2015. SD/- SD/- [T.S.KAPOOR,] (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10TH DECEMBER, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SHAM LAL, JAMMU 2. THE ITO CIRCLE, JAMMU 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR DR, ITAT, AMRITSAR. BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.