Case Law Details
Shri Bhagwandas Nagla Vs ITO (International Taxation) (ITAT Hyderabad)
Conclusion: TDS under section 195 was to be deducted in case payment for purchase of immovable property made to GPA (general power of attorney) holder of non-residents because, at best, GPA holder could be considered as only a conduit between assessee and the owners of property and therefore, in true sense, assessee had made payment to non-residents only.
Held: Assessee, being a resident, had purchased an immovable property from the NRIs and the sale deed had been executed by the GPA holder of the non-residents. Assessee’s claim that he had paid the sale consideration to the GPA holder in India and therefore, was not required to make TDS under section 195 was not acceptable because, at best, GPA (general power of attorney) holder could be considered as only a conduit between assessee and the owners of property and therefore, in true sense, assessee had made the payment to the non-residents only. Hence, assessee was required to deduct the tax at source u/s 195 before making the payment. As assessee had clearly failed to do so and therefore, AO had rightly initiated the proceedings u/s 201(1).
FULL TEXT OF THE ITAT JUDGEMENT
This is assessee’s appeal for the A.Y 2010-11 against the order of the CIT (A)-10, Hyderabad, dated 31.08.2016 confirming the order of the AO passed u/s 201(1) and 201(1A) of the Act. The assessee has raised the following grounds of appeal:
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