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2014 (11) TMI 638 - AT - Income TaxTDS liability u/s 194LA - voluntary surrender of land - value of development rights – There was no compulsory acquisition and was no payment of any monetary consideration – Accourding to AO The transfer of land to BBMP though is stated to be free of cost but in reality the owner gets DRCs. The question of determining consideration for transfer can be resolved by valuing the DRCs and for this purpose the best way to determine the value is to rely on the provisions of Sec.50-C of the Act and value the land surrendered as per the guideline values fixed by subregistration for stamp duty valuation and registration. Held that:- Assessee rightly contended that the application of Sec.194LA is purely a legal issue which can be decided on the basis of facts on record - the process of surrender of land for public purpose by owners of land and issue of CDRs has no element of “Compulsory Acquisition” which is necessary to attract application of the provisions of Sec. 194LA of the Act - The meaning of the term “compulsory acquisition” is that land should be taken under statutory powers without the agreement of the owner - the surrender of land by owners was voluntary and in exercise of option under a notification laying down conditions for grant of TDR in exercise of powers u/s.14-B of KTCP. BBMP wherever owners did not respond to offer of CDRs, BBMP has resorted to compulsory acquisition proceedings in accordance with the provisions of the Land Acquisition Act, 1894 - the provisions for deducting tax at source and paying it over to the Government on behalf of the recipient of the payment is in the nature of vicarious liability - But where neither there is quantification of the sum payable in terms of money nor actual payment in monetary terms, it would be unfair to burden a person with the obligation of deducting tax at source and exposing him the consequences of such default - the liability to pay tax is that of a third person and not that of BBMP and the spirit behind the provisions of Sec.190 of the Act has been totally lost sight of by the Revenue - the provisions of Sec.194LA of the Act were not applicable because there was no compensation paid towards compulsory acquisition under any law in force and therefore the order u/s.201(1) & 201(1A) of the Act is set aside. The provisions of Sec. 194LA of the Act would apply only when there is monetary payment - provisions of Sec. 194LA of the Act applies only when the person making payment should make payment of a “sum of money” which clearly indicates that the provisions of Sec.194LA of the Act are applicable only when payment is made in terms of money - The expression “any sum” used in Sec.194LA of the Act is a clear indication that those provisions are applicable only when payment is of consideration in terms of money - the general word in Sec.194LA of the Act is “payment of such sum” and the mode of payment qualified is cash, issue of cheque or draft or by any other mode - The expression any other mode has therefore to be confined only to payment of “any sum” in a mode other than cash, cheque or draft and not to a case where DRCs are issued - Even on this ground the order u/s.201(1) & 201(1A) of the Act is to be set aside – thus, the provisions of Sec.194LA of the Act are not applicable and the orders u/s.201(1) & 201(1A) of the Act as upheld by the CIT(A) are held to be bad in law – Decided in favour of assessee.
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