Shamim Irshad, New Delhi V. ITO ward- 77(2), New Delhi

ITA 8740/DEL/2019

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 1015 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Appeal Filed On: 07-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.8740/DEL/2019 Assessment Years 2016-17 Shamim Irshad, A-4, Taj Enclave, Geeta Colony, New Delhi. v. ITO, Ward-77(2), New Delhi TAN/PAN: ABBPI4199N (Appellant) (Respondent) Appellant by: Shri Irshad Haneef, Adv. Respondent by: Shri Abhishek Kumar, Sr.D.R. Date of hearing: 23 06 2022 Date of pronouncement: 02 08 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The c apt io ne d ap p eal ha s be en f i le d at th e i ns ta nc e o f the ass es se e a ga in st t he or der of t he Co mmi s si on er of Inc o me Ta x (Ap pe al s) -X XX I, Ne w De lh i [ ‘CI T( A)’ i n s ho rt] dat e d 23 .0 1. 20 19 ari si ng f ro m t he a sse ss me nt or der da ted 27 .0 2. 20 17 p as sed b y th e As ses si ng Of f icer ( AO ) un de r S ec ti on 201 (1 ) r .w .s. 20 1( 1A) of th e Inc o me Ta x Ac t, 19 61 (t he A ct) c on ce r nin g A Y 2 01 6- 17 . 2. As p er it s g ro un ds of appea l, t he a ss ess ee h as cha ll en g ed th e act io n of the R ev e nue Au th ori ti es i n i mp os in g th e lia b ili t y u nd er Sec ti on 2 01 (1 ) r. w. Sect io n 20 1( 1A ) a t Rs .6 7,2 00 /- o n th e gro un ds of inf ri ng e men t of pro vi si on s of S ec ti on 19 4I A( 1) of the Act f or n on ded uc ti on of t ax w h ile mak in g pa yme n t f or pu rc has e of p ro per t y. 3. W h en th e mat te r w as cal le d f or h ear in g, th e l d. co un se l f or th e I.T.A. No.8740/DEL/2019 2 ass es se e, at t he ou tse t, s ub mi tte d th a t t he as se ss ee h as pu rc ha se d cer ta in h ou se pr ope rt y j oi ntl y w i th h er hu sba n d at a t ot al con si de ra tio n of Rs .55 l ak hs pai d to t h e sel le r of the p ro p ert y. I t wa s su b mitt ed t hat t he ass es se e i s a j oi nt ow ne r ha s c on tr ib ute d Rs .4 0 lak h to t he se ll er a nd re ma in in g Rs .1 5 la kh s ha s bee n co n tri bu te d b y the o th er jo in t o wn er. I n t hi s re g ard , it wa s su b mitt ed t hat pro vi si on s of Se ct i on 19 4I A( 1) is n ot at tra ct ed in t he f act s of th e cas e whe re th e as s ess ee he re in ha s m ade pa yme n ts b el o w t hr es ho ld li mit of R s. 50 la kh s f or pur ch as e of pro pe rt y. I t wa s as ser te d th at the as ses se e ha vi ng pai d le ss t ha n R s. 5 0 la kh s as a jo in t o wn er i s no t obl ig ed un der Se cti on 19 4I A( 1) n ot wit hs ta nd in g th e f act th at agg re ga te c on si de r ati on of the pro pe rt y pu rc has ed ex c eed s R s. 50 lak hs . T he ld . c ou nse l t hu s s ub mi tt ed tha t n o l ia bilit y c an b e f ix ed un der S ect io n 20 1( 1) r. w. Se cti on 2 0 1(1 A) i n t he abse nce of a n y def au lt in t er ms of Sec ti on 1 94 IA (1 ) o f the A ct. 4. The ld. DR f or t he Re ven ue , on th e ot her han d, rel ie d up on t he ord er of the CI T( A) a nd co nt en de d tha t p ro vi si on s of Sec ti on 19 4I A(1 ) re qu ire s the a ss es se e to de d uct T D S and dep os it th e su m wit h t he e xc heq ue r in a cco rd an ce w ith l aw wh ere th e pur cha se con si de ra tio n of t h e p ro pe rt y i s Rs .5 0 l ak hs o r more. I t w as t hu s su b mitt ed th at th e ass es se e h as cle ar l y def a ul te d in c o mpli an ce of Sec ti on 19 4I A( 1) of the A ct an d t her ef or e co ns eq ue nce s u nd er Sec ti on 2 01( 1) r. w. Se cti o n 2 01 (1 A) mu st f o ll ow as a r e sul t t he re of and h en ce n o i nt erf ere nc e wit h th e or d er of t he CI T( A) i s cal le d f or . 5. W e ha ve c ar ef ull y cons id er ed t he r i val s ub mi ss ions . I n the ins ta nt ca se , f ew ad mit te d f ac ts ar e re qu ire d to be n ote d. T he ass es se e he re in i s one of th e jo in t tran sf er ee s f or p urc ha se of pro pe rt y f o r a t ot al con si der at io n of R s.5 5 l ak h whic h is mo re t ha n thr es ho ld li mi t as pr es cri be d un de r Se ct io n 19 4I A of the A ct. I.T.A. No.8740/DEL/2019 3 Ho we ver , th e a ss es see i n t he i ns tan t c ase , bei ng a j oin t o wn er cl ai ms tha t s he is a j oi nt hol de r t o t he ex te n t of 75 % in the pr ope rt y. Th e ass es se e he re in ha s pa id a su m of Rs .4 0 la kh s o nl y as a joi nt tra nsf e ree of th e pro pe rt y. The que st io n t hu s pio sed f or con si de ra tio n h er ei n is wh eth er an y leg al obl ig at ion ar ise s u nd er Sec ti on 19 4I A of the Ac t whe re th e co nsi de ra ti on pai d b y e ach tra nsf e ree is b el ow thre sh ol d l i mit p r esc ri be d un der Se c tio n 1 94 IA of th e Ac t. 6. The p ro vi si on s of S ect io n 19 4I A r ea ds as un de r: “ 1 9 4 - I A (1 ) A n y p e r s o n , b e i n g a t ra n s f e r e e , re sp o n si b l e f o r p a y i n g (o t h e r t h a n ) t h e p e r s o n r e f e r r e d t o i n se c t io n 1 9 4 L A ) t o a re s i d e n t t ra n sf e r o r a n y su m b y w a y o f c o n s i d e r a t i o n f o r t r a n sf e r o f a n y i m m o v a b l e p ro p e rt y (o t h e r t h a n a g ri c u l t u ra l l a n d ) , sh a l l , a t t h e t i m e o f c r e d i t o f s u c h su m t o t h e a c c o u n t o f t h e t r a n s f e ro r o r a t t h e t i m e o f p a y m e n t o f s u c h su m i n c a s h o r b y i s s u e o f a c h e q u e o r d ra f t o r b y a n y o t h e r m o d e , wh i c h e v e r i s e a rl i e r, d e d u c t a n a m o u n t e q u a l t o o n e p e r c e n t o f su c h su m a s i n c o m e - t a x t h e re o n . (2 ) No d e d u c t i o n u n d e r s u b - s e c t i o n (1 ) sh a l l b e m a de wh e r e t h e c o n s i d e r a t i o n f o r t h e t ra n s f e r o f a n i m m o v a b l e p ro pe rt y i s l e s s t h a n f i f t y l a k h ru p e e s. (3 ) T h e p r o v i si o n s o f S e c t i o n 2 0 3 A s h a l l n o t a p p l y t o a p e r s o n re q u i r e d t o d e d u c t t a x i n a c c o rd a n c e w i t h t h e p ro v isi o n s o f t h i s se c t i o n . ” 7. Sec ti on 1 94 IA se e ks to p ro vi de th at ev er y t ra nsfer ee , at th e ti me of p a yme nt o r cr ed it in g a n y s u m as c on si de rat io n f or tr an sf er of i mmov ab le p ro p ert y (o th er t ha n a gri cu lt ure la nd) to a resi de nt tra nsf e ror s ha ll de d uct @ 1% of su ch s u m. I.T.A. No.8740/DEL/2019 4 7.1 The moo t qu es ti on the ref o re is w he th e r t he o bliga ti on p ro vid ed un der S ec ti on 1 94I A i s qu a th e p ro pe r t y or q ua th e tr an sf ere e. 7.2 Fr o m th e t ex t an d ten or of p ro vi si on s of Se ct ion 19 4I A, it is evi de nt th at t he obl ig at io n u nd er Sec ti on 19 4I A r elate s t o a tra nsf e ree r es po ns i ble f or p a yi n g to a res id en t transf e ro r an y s u m b y wa y of co ns id era ti on f o r tr an sf er of i mmo v ab le pr oper t y. S ec on dl y, obl ig at io n to d ed uc t t ax a ri ses a t th e t i me of cr edit of s u ch su m to the ac co un t of th e tra nsf e ror or at the ti me of p a yme nt o f such su m to t he t ran sf er or . Th us t wo f ac to rs co- ex is t f or appl ic abi li t y of Sec ti on 19 4I A. T he f ir st f a ct or, as no te d a bo ve, rel ate s t o t he obl ig at io n of the tr ansf e re e and t he s e con d f act or f ixe s o bli ga ti on t o ded uc t t ax at t he ti me of cr ed it or pa yme nt. W he n rea d c o mbi ned l y; wh ile t he f irs t li mb of S ec ti on 1 94 IA r ef ers t o a sin gu la r exp re ss io n, i.e ., ‘ tr an sf ere e’ ( i n di st in cti on to t ra nsf er ee (s) co mb in e d), sec o nd li mb pr ov id es f or ti me of d is cha rg e of ob li ga ti on whic h i n tu rn , dep en ds on th e a c tio n of e ac h t ran s f eree (in ex cl usio n to ot he r tra nsf e ree ) i .e. , e it her cr ed it i n i ts acc ou nts or ac tu al p a yme nt. Th us , wh en th e pr ov is io n is re ad a s a wh ole , it g iv es a n inf al li ble i mpre ss io n t hat ob lig at io n ca st un der Sec ti on 1 94 IA is qua eac h tra nsf e ree an d no t qu a th e ag gr eg at e con si de ra tio n. Th e rea so ns a re not f ar t o s ee k. It wil l n ot be p rac ti ca ble to ac hiev e t he r equ ir e men t of sec on d l i mb if t he c as e of t he Re v enu e i s a cc ep te d t h at i t i s qua tot al c on si de ra tio n inv ol ve d a nd n ot e ach tra nsf e ree . T he obl ig ati on cas t u nd er S ec ti on 19 4I A ar is es t o a p art ic ula r t ransf er ee at t he t i me of pa yme n t of c o nsi de ra ti on or at t he ti me of cr ed it in it s o wn acc ou nt s. 7.3 The l aw c an no t be rea d to e xp ec t on e tra nsf e ree t o de du c t TD S on beh alf of o th er t ran sf er ee a t t he ti m e ac ti on taken b y h i m t ow ard s pa yme nt or c re di t. If the c on te nti on s of the R ev en ue a r e ac cep te d I.T.A. No.8740/DEL/2019 5 tha t vi ca ri ou s li ab il it y i mpo se d un de r Sec ti on 19 4IA is l i nke d t o th e val ue of th e pr op e rt y, an a no ma lo us and uni nt en de d si t uat io n wi ll ari se f or d ed uc ti o n of TD S. T he c o nte nt io n of the as ses se e th at Sec ti on 19 4I A o p era te s q ua e ac h t ran sf er ee a nd no t qua to ta l con si de ra tio n i s in a bs ol ut e c on g rue nc e w it h t he sch e mat ic int er pr eta ti on of Se cti on 1 94 IA of t he Act . 8. On f a ct s, th e as ses see i n t he i ns ta nt c ase h as ad mi tt ed l y pa id Rs . 40 la kh s wh ic h is b elo w t hr es ho ld li mit pro vi ded t o tri gg er t he obl ig at io n pr ov id e d in Sec ti on 19 4I A of the Ac t. Hence , S ect io n 19 4I A ha s n o ap pl i cat io n w her e a t ra n sf ere e in qu estio n has ne it her cre di te d nor p ai d c on sid er at io n f or t r ansf e r of i mmo v ab le pr op er t y in ex ce ss of t hr es h old l i mit of Rs. 5 0 lak hs . 9. W e th us f i nd meri t in th e p le a r ai se d o n b eh alf of t he as se sse e f or h ol di ng th e as ses se e to be n ot a n a ss es se e i n def a ult f or th e pur po se s of Se cti o n 20 1/ 20 1( 1A ) of the A ct. He nce , w e rev er se a nd can ce l th e li ab il it y de man d r ai sed un d er S ec tio n 2 01 (1 ) r .w. Se ct io n 20 1(1 A) of t he Ac t i n t he ab se nc e o f an y def a ult c ommit te d wit h ref er enc e to S ect io n 1 94 IA of th e Act . 9. In th e res ul t, t he ap pea l of th e as se ss ee is a llow ed. Order pronounced in the open Court on 02/08/2022. Sd /- Sd /- [CHALLA NAGENDRA PRASAD] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02/08/2022 Prabhat