Archanaben Rajendrasingh Deval Vs ITO (ITAT Ahmedabad)
TDS default set aside: ITAT Ahmedabad holds threshold u/s 194IA applies per seller
Ahmedabad ITAT quashed the demand of ₹1,00,907 raised u/s s 201(1) & 201(1A) for failure to deduct TDS u/s 194IA, holding that the ₹50 lakh threshold must be tested with respect to each individual seller, & not the transferee’s aggregate share.
Assessee purchased property jointly for ₹1.23 crore, with her share being ₹53.67 lakh. Payments to two individual sellers were ₹21.83 lakh & ₹31.83 lakh, both below ₹50 lakh. AO held that since her total share exceeded ₹50 lakh, TDS @1% u/s 194IA was applicable.
AO & CIT(A) relied on GUDA’s letter placing the land within 2.61 km of Gandhinagar Municipal limits to deny agricultural land claim & treated assessee as “assessee-in-default” u/s 201 for not deducting TDS.
Assessee argued that the land was classified as agricultural in revenue records & not a capital asset u/s 2(14)(iii). Assessee also argued that payments to each seller were below the ₹50 lakh threshold & thus, Section 194IA(2) is not attracted.
ITAT relied on Vinod Soni v. ITO & Bhikhabhai H. Patel v. DCIT holding that the TDS threshold u/s 194IA applies per transferor-transferee pair.Tribuanl held that where consideration to each seller is below ₹50 lakhs, TDS is not required. Tribunal held that CIT(A) failed to examine this key legal issue or address judicial precedent.
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