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2023 (3) TMI 596 - AT - Income TaxTDS u/s 195 - non deduction of tax at source - Residential status of payee unknown - Bonafide belief that the payee is resident of India (who is non-resident) - assessee is engaged in the business of real estate and developed a residential apartment complex - consideration paid in terms of the 'Agreement' entered into with Mr. Bhupathi as assessee sold one of the apartments in this residential complex to him - residential status of Mr. Mahesh Bhupathi - HELD THAT:- As in the present case, the assessee has not brought on record any evidence to show that at that time of payment it was aware that no amount will be chargeable to tax in the hands of the payee. In fact, as also mentioned above, as per the assessment order in the case of the payee, positive income under the head capital gains has been arrived at, as against loss claimed. The seller was non-resident and he has been associated with the assessee company since 2005, though he provided Indian address for all the transactions carried by him. The claim of the assessee that he is unaware of the residential status of Shri Mahesh Bhupathi cannot be accepted as he was with the company since long time and this argument of the assessee do not come to present assessee’s rescue or absolve him of the duty to do what the law required the present assessee to do. In our opinion, facts on record show that the assessee well aware of the residential status of Shri Mahesh Bhupathi and the assessee liable as per the provisions of section 195 of the Act to deduct at a specified rate from the purchase price before making payment to seller, who is being NRI. CIT(A) rightly held that assessee is required to determine the income component involved in the payment to non-resident on account of transfer of immovable property on which withholding tax liability is to be computed and the payer would be considered as being in default for non-withholding of taxes only in relation to such income component. In the present case, Ld. CIT(A) rightly held that assessee is liable to deduct TDS on the income component of Rs.1,74,47,180/- as against the income component determined by AO at Rs.1,97,27,780. Accordingly, these grounds of appeal of the assessee are dismissed. Charging of interest u/s.201[1A] - The action of the A.O. in charging the assessee interest u/s 201(1A) is consequent to the quantification of tax demand u/s 201(1) r.w.s. 195 of the Act and is chargeable in respect of any person who has failed to deduct the whole or any part of tax at the rates and specified therein. We, therefore, uphold the charging of interest u/s 201(1A) of the Act. This ground of appeal of the assessee is rejected.
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