1. Payment made for Purchase of Property from Non -Resident to the GPA holder who is an agent of non-resident and to the Housing Finance Company for Non-Resident, is liable for deduction of TDS under section 195 of the Income Tax Act, 1961
2. Ground Nos.1 & 7 are general in nature and do not require specific adjudication. Ground No.4 is related to the contention of the assessee that the payment made to the GPA holder who is an agent of non-resident and the payments made to the Dewan Housing, is not liable for deduction of TDS as per the provisions of section 195 of the Income Tax Act, 1961 (hereinafter called as ‘the Act’). In the assessee’s case, the assessee purchased the property from Mr. G. Satish Kumar, resident of the USA vide document No.1492 on 11.4.2011 and registered before the SRO, Vizianagaram for a sum of Rs. 34 lakhs. As per the provisions of section 195 of the Act, tax is to be deducted on any sum payable to Non-resident which is chargeable to tax. The assessee contended that the assessee has given a General power of attorney to Smt. Allam Baby and the sale consideration was paid partly to Dewan Housing Finance Ltd. and the GPA holder on behalf of seller. The purchaser had paid a sum of Rs. 28,14,000/- to M/s. Dewan Housing Private Limited towards the adjustment of loan taken by the seller and the balance amount of Rs. 5,86,000/- was paid to the GPA holder. Since the payment was made to the GPA holder and the Dewan Housing Finance Ltd. and it was not paid to NRI directly, the provisions of section 195 of the Act are not attracted.
3. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The assessee has purchased the property belonging to Shri Satish Kumar, who is a resident of USA and who happens to be NRI. Smt. Allam Baby is a GPA holder for the purpose of facilitating the transaction in India. Similarly, the housing loan was taken by the seller from Dewan Housing Limited, hence, the payments made to Dewan Housing Limited as well as with Smt. Allam Baby constitutes the payments made to the non-resident and the TDS is deductible as per the provisions of section 195 of the Act and this ground of appeal of the assessee is dismissed.
