TMI Blog2014 (6) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... n paid for acquiring the property. Both the land portion as well as structure portion acquired by the assessee falls under the word "any immovable property" as defined in section 194LA and to the extent of property acquired under Land Acquisition Act, the assessee is covered by provisions of section 194LA of the Act - to the extent of land and structures acquired through mutual negotiations u/s 146 of GHMC Act, the provisions are not applicable to the acquisition of property which is not compulsory - only in case where there is delay from date of TDS to the date of payment of tax by the persons, interest u/s 201(1A) can be levied - The aspects also required to be examined in detail item-wise and then only AO can raise the demand either u/s 201(1) or 201(1A) – thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee. - ITA Nos.140, 142 & 141/Hyd/2014 - - - Dated:- 18-6-2014 - B Ramakotaiah And V Durga Rao, JJ. For the Appellant : Mr S Rama Rao For the Respondent : Mr P Somasekhar Reddy ORDER:- PER : B Ramakotaiah These three appeals are by assessee against the Orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructure value of the compensation though the entire payment was made to the same party/land owner. AO noted that during the year under consideration assessee paid compensation for structures amounting to Rs.57,99,75,942/- and assessee has not included this amount while deducting tax. 3. Assessee was asked to explain the reasons for non-deduction of TDS on the value of the structure portion paid to the land owner. Assessee, through the Financial Advisor vide their letter dated 24.03.2011 informed that assessee has not deducted the TDS on the structural values as per the orders of CIT(A)-IV, Hyderabad passed for A.Y. 2000- 2001 in assessee s own case. Assessee informed that provisions of section 194LA are not applicable as the assessee is not compulsorily acquiring the land. A.O. was of the opinion that as per provisions of section 194LA, assessee is liable to deduct tax for acquisition of lands or for acquisition of any immovable property including structures where payment exceeds Rs. 1 lakh and above. A.O., however, noted that in A.Y. 2000-01 assessee has taken a stand that land owners voluntarily gave the land to MCH for no consideration and the amount paid was actually for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter demolishing the structures and paid compensation on demolition of those structures. The intention of the appellant to demolish structures is to acquire land. The argument of the appellant that there is no compulsory acquisition because the agreement was voluntarily entered by the owners is also not having strength because the owners agreed and given consent and accepted voluntarily for the purpose of the award and not to have disputes while receiving compensation. Therefore, it is compulsory acquisition only. Since the appellant has acquired land after demolition of structures and paid compensation which is in the nature of compensation as per section 194LA of the Act. Hence, the action of the A.O. that the provisions of section 194LA are applicable on the compensation paid for demolition of structures also is hereby upheld. Thereby, the appellant s ground of appeal in this regard is dismissed. 6. Ld. Counsel contended that the Ld. CIT(A) was not correct in confirming the order as the Ld. CIT(A) has not appreciated the issue in correct perspective. It was submitted that similar issue arose in A.Y. 2000-01 under the erstwhile provisions of 194L and Ld. CIT(A)-V, Hyderabad vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed one hundred thousand rupees. Explanation.-For the purposes of this section,- (i) agricultural land means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (ii) immovable property means any land (other than agricultural land) or any building or part of a building.] 8.1 As can be seen from the above, the following conditions are to be satisfied before the provisions are invoked: (i) There has to be an acquisition. (ii) The acquisition must be compulsory in nature. (iii) The acquisition must be of an immovable property; and (iv) Compensation or consideration must be paid on account of acquisition of such immovable property (other than agricultural land) (v) The amount paid should exceed one hundred thousand rupees (at that point of time). 8.2. In A.Y. 2000-01, Ld. CIT(A)-V, Hyderabad on considering the assessee s facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Whenever it is provided by this Act that the Commissioner may acquire or whenever it is necessary or expedient for any purpose of this Act that the Commissioner shall acquire any immovable property such property may be acquired by the Commissioner on behalf of the Corporation by agreement on such terms at such rates or prices not exceeding such maximum as shall be approved by the Standing Committee, either generally for any class of cases or specially in a particular case. (2) And whenever, under any provision of this Act, the Commissioner is authorised to agree to pay tile whole or any portion of the expenses of acquiring any immovable property, he shall do so on such terms and at rates or prices not exceeding such maximum as shall be approved by the Standing Committee as aforesaid. (3) Subject to U18 provisions of this Act, it shall be lawful for the Commissioner on behalf of Corporation to agree with the owner of any land or of any interest in land needed by the Corporation for the purposes of any Scheme under Chapter XIII or with the owner of any right which may have been created by legislative enactment over any street forming part of the land so nee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic purpose within the meaning of the provisions of the said Act.] 4.3. It is clear from the above that sec.146 of HMCA, 1955 is an independent provision for acquiring immovable property by the appellant through an agreement without taking recourse to the provisions of the Land Acquisition Act. 1894 and only in the event of failure to invoke the provision of sec.146 of the HMCA in any particular case, the question of compulsory acquisition of land under the Land Acquisition Act arises. During the relevant period, however, there was no such case, where proceedings under the Land Acquisition Act was initiated and in all the cases, the acquisition was through the provisions of sec.146 of the HMCA. 4.4. The acquisition of land by the MCH was through correspondence and the affidavit of the owner of the property while claiming the compensation, as per the prescribed proforma clearly indicates that the structures are surrendered voluntarily. It is also mentioned that the property is made over by private negotiations. 4.5 The land between the removed compound wall and the new compound wall stood surrendered with the road widening work in the absence of sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be paid on account of acquisition of such capital asset. In other words, all the aforesaid four conditions have to be cumulatively satisfied before invoking tile aforesaid provisions. In the present case. even though. there is acquisition, it is not compulsory. The acquisition is through an agreement voluntarily entered into between the appellant and the owner of the property. Even otherwise, there cannot be a compulsory agreement. Secondly, the appellant had not paid compensation for the land. Since the compensation has been paid for the demolition of the existing structure the same cannot be said to have been paid on account of acquisition of a capital asset. 5.2. The Assessing Officer in her order has not brought out any evidence to the contrary than what has been submitted before her by the appellant to substantiate that the contentions made before her were wrong and untenable. She has also not brought any facts on record, to prove that the acquisition of the land by the appellant for the purpose of road widening was actually in the nature of compulsory acquisition as envisaged in sec. 194L of the Act. In absence of any material to the contrary and in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there are three types of acquisitions under taken by the assessee. For example, in the Draft Award proceedings No.AA/777/2004 dated ---/11.2006 placed in the paper book at pages 1 to 9, the proceedings do indicate that there was publication of draft notification under section 4(1) of the Land Acquisition Act, 1984 for acquiring the properties for the purpose of road widening from Liberty Junction to Narayanaguda Junction in respect of 5 properties. On discussion of various rights of various persons and the proceedings involved, the draft order do indicate that premises No.1-3-6-691/1 to 10 was negotiated by the assessee and the parties requested to withdraw the land acquisition proposals. Therefore, the withdrawal proposals under section 48(1) of Land Acquisition Act were being submitted to the Collector, as the properties were takenover by MCH under private negotiations and the Requisitioning Authority has requested to withdraw the land acquisition proposals. (Last para in page 5). Thus, in the above case the property was negotiated under section 146 of the HMC Act. This is one mode of acquiring the property. 9.2. As far as property No.2 i.e., premises No.3-6- 727/1 are concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 146 are applicable for both land portion as well as structure portion. Assessee having deducted tax on the compensation paid on land portion, it is not correct to contend that structure portion is not acquired and therefore, TDS provisions are not applicable. Not only that, whether assessee pays the compensation for demolition of the existing structure or acquires and later demolishes for the purpose of road, the facts are similar so long as the provisions of Land Acquisition Act were invoked for acquiring the property and the Land Acquisition Officer determines the compensation paid for acquiring the property. Therefore, in our opinion, both the land portion as well as structure portion acquired by the assessee falls under the word any immovable property as defined in section 194LA and therefore, to the extent of property acquired under Land Acquisition Act, we are of the opinion that assessee is covered by provisions of section 194LA of the I.T. Act. We make it clear that to the extent of land and structures acquired through mutual negotiations under section 146 of GHMC Act, we agree with the opinion of the Ld. CIT(A) given in A.Y. 2001-02 under section 194L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no dispute whatsoever that P Corpn. had already paid the taxes due on its income received from the appellant and had received refund from the Tax Department. The Tribunal came to the right conclusion that the tax once again could not be recovered from the appellant (deductor-assessee) since the tax has already been paid by the recipient of income . Only in case where there is delay from date of TDS to the date of payment of tax by the said persons, interest under section 201(1A) can be levied. These aspects also required to be examined in detail item-wise and then only AO can raise the demand either under section 201(1) or 201(1A). With these directions, the orders of A.O. and CIT(A) are set aside and the entire matter is restored to the file of A.O. for examining the facts and raising the demands accordingly. Accordingly, appeal of the assessee is allowed for statistical purposes. 13. Similarly in other years also since common facts are involved and issues being similar, A.O. is directed to examine the facts in each of the years and decide accordingly. The orders of AO and CIT(A) are set aside to redo as directed above. 14. In the result, appeals of the Assessee ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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