TMI Blog2015 (7) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be burdened while making the payment to a non-resident for deducting tax at source. Also there was no revenue loss to department as Jasbir Singh Sarkaria had paid taxes and the assessee was entitled to the benefit of Article 26 of DTAA between USA and India. - Decided in favour of assessee. - ITA no. 1532/Del/2011 - - - Dated:- 24-7-2015 - Shri S.V. Mehrotra and Shri A.T. Varkey, JJ. For the Petitioner : Shri P. Dam. Kanunjna Sr. DR For the Respondent : Shri Salil Agarwal Adv. ORDER PER S.V. MEHROTRA, A.M..: This appeal, preferred by the revenue, is directed against CIT(A) s order dated 9-12-2010 in appeal no. 39/09-10, relating to A.Y. 2006-07. 2. The AO had levied interest u/s 201(1A) in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention that section 195 only requires deduction of tax from income and not from capital gains. He referred to section 2(24)(vi), which includes capital gain also. (ii) As regards the assessee s plea that assessee had no knowledge of the fact that one of the seller was non-resident, because the agreement was entered into only with Indian residents, one of which viz. Shri Karanbir Singh Sarkaria was general power of attorney holder of Shri Jasbir Singh Sarkaria, AO observed that the same could not be considered reasonable in the facts and circumstances of the case. (iii) As regards the assessee s plea that in the case of Coca Cola Beverages 293 ITR 226 the Hon ble Supreme Court has held that the deductor cannot be treated as as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration was paid in India through a/c payee cheques drawn in Indian rupees and the payment was collected in India through Indian banks and no remittance to any foreign country was involved in the instant case. The provisions of section 195 apply only when any remittance is required to be made to any foreign country. (c) As per provisions of section 195(6) the person responsible for making any payment to a non-resident is to furnish the information relating to such payment in form no. 15CA and 15CB read with Rule 37BB of the Income-tax Rules, which requires the information in regard to remittance made by assessee. Thus, the furnishing of information under subsection (6) of section 195 relates to remittance of payments to a non-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (iv) The assessee s submission was that when a property is purchased by a resident Indian from any other resident Indian and sale proceeds are paid, then in such circumstances there is no requirement of deduction of any TDS in any of the provisions of the Act. Therefore, even if it is considered just for the sake of argument and discussion, that the impugned transaction of purchase of land was between a resident Indian and a USA resident, then also there could not be any liability for deduction of tax at source on payment of sale proceeds, as otherwise, this will be a discrimination relating to the taxation and connecting requirement and will make it more burdensome for the US resident. (v) Without prejudice ton above submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer on the fact whether any interest had been deposited by Sh. J.S. Sarkaria. 2. On the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the benefit of Art. 26 of DTAA was available to the assessee in respect of withholding tax liability. 7. Ld. DR narrated the facts as noted earlier and pointed out that assessee had made payment to Shri Jasbir Singh Sarkaria, a citizen of USA without TDS and, therefore, there was default on the part of assessee u/s 195. He pointed out that since as per the directions of authorities for Advance Ruling, Shri Jasbir Singh Sarkaria had paid the tax, therefore, the AO did not pass any order u/s 201(1), treating the assessee as assessee in default and only levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of a non-resident seller, section 163 of the Act has been specifically enacted where a resident purchaser of a capital asset is to be regarded as an agent of the non-resident and tax liability of the non-resident is then fastened on the purchaser u/s 161 of the Act. 8.1. Ld. counsel further submitted that ld. CIT(A) rightly held that in view of Article 26 of DTAA between USA and India, since no TDS is required to be made in case of sale of immovable properties within India, therefore, an assessee could not be burdened while making the payment to a non-resident for deducting tax at source. 9. We have considered the rival submissions and perused the record of the case. Facts are not disputed. Admittedly, assessee made the payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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