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Jaipur Development Authority Versus The ACIT (TDS) Jaipur

2015 (9) TMI 134 - ITAT JAIPUR

TDS liability u/s 194LA - payments in lieu of the agriculture land acquired by JDA for carrying out its development plans - assessee in default - Held that:- From the record, it emerges that the assessee demonstrated its case for no liability of TDs before the ACIT –TDS that not only in terms of plain reading of Section 194LA but also furnished the desired information in the proforma and enclosures as advised by the AO to be furnished in the order to hold JDA as notliable under explanation (i) a .....

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ands are actually cultivated or not. What section imposes is determination of the record which has been done by the assessee.

Barani land is a type of agricultural land which is clearly evident from Revenue regulations and record placed on the paper book. The objection raised by the AO and ld. CIT(A) about Girdawari is irrelevant and no-consequential.Tehsildar appointed by JDA cannot be denied to be a Revenue Officer inasmuch as he works as a Revenue Officer in terms of JDA Act.
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ricultural land on per records and in terms of Section 194LA, Explanation (i). There is no obligation to deduct any TDS thereon. - Decided in favour of assessee. - ITA No. 134 to 136/JP/2015 - Dated:- 29-5-2015 - R. P. Tolani, JM And T. R. Meena, AM,JJ. For the Appellants : Shri Shyam Lal Agarwal & Shri Tarun Agarwal, CA For the Respondent : Smt Neena Jeph, JCIT ORDER Per R. P. Tolani, JM These is a set of three appeals filed by the assessee against the consolidated order of the ld. CIT(A)-3 .....

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Jaipur Region. It came into existence by Jaipur Development Authority Act in the year 1982 (for short JDA). The assessee had been held to be eligible for registration u/s 12A of the Act as a charitable organization by ITAT orders. During the course of verification of TDS matters, it was found that the JDA i.e. through its Land Acquisition Officer (for short 'LAO') of JDA is making payments in lieu of the agriculture land acquired by JDA for carrying out its development plans. It was foun .....

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essee were office orders for land acquired under various schemes, note sheet for lands acquired, financial and administrative approval orders for making payments to various parties etc. which were not sufficient to hold that JDA was not liable for TDS u/s 194LA. During the course of verification proceedings, vide this office letters dated 7-08-2013 and 14-08-2013, the assessee was asked to submit details of payment of compensation scheme-wise from A.Y. 2011- 12 onwards along with TDS deducted an .....

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ea would be covered since these lands are not agriculture lands u/s 2(14) (iii)(a) of the I.T. Act . 4. That we submit the reply before your goodself that for the purpose of Section 194LA the lands covered u/s 2(14) (iii)(a) and (b) are also exempt and the same has been mentioned in the explanation to Section 194LA as cited below:- Explanation- For the purpose of this section:- (i) "Agriculture land' means agricultural land I India including land situate in any area referred to in items .....

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t will be unnecessary hardship to the poor agriculturists to file the return and take the refund/ seek exemption. In this reference after due discussion, the specific letter was written to TDS authorities vide letter dated 22-04-2009 explaining the same, a copy of which is enclosed herewith. 6. In this letter, the system of verification was also asked so as to keep the details that the land was agricultural land and used for agriculture purposes. All detailed discussions and deliberations the de .....

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DA, an order of verification as agriculture land was issued in all cases of agriculture land that the land is agriculture land, is used for the agriculture purposes and also the compensation is also paid according to that only. The copy of the office order issued the format in case of agriculture land is also enclosed herewith vide office order copy no. JDA /AO(P)/2011/D-757 dated 22-12-2011. The copy is enclosed herewith." 2.3 The AO made further enquiries and was of the view that the asse .....

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h sufficient proof in land about the land being agriculture i.e. certificate of tehsildar (at JDA) and affidavit from the owner about agriculture being practiced on land and so it being agriculture land. To being with, a certificate from deductee that the land being acquired is agricultural land is not any evidence. The certificate from Tehsildar that was produced by the assessee was of a person who is an employee of the assessee. He is only designated as a Tehsildar for a particular zone and it .....

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ship of a particular land. All land, whether barren, undulating or cultivable is classified as agricultural in a Jamabandi. The Jamabandi report does not give any details as to the actual use of land. A Girdawari report on the other hand gives details of land acquisition. During the course of verification, the assessee was not found in possessin of any Girdawari Report. The assessee has till date not furnished any Girdawari Report for the land claimed to be agricultural land to the Department. I .....

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had asked the assessee to collect all necessary evidences to be satisfied that it is really agriculture land and produce before the Department whenever called for. However, as is evident from discussion in preceding paras, no such evidences were collected to ensure that land was agriculture and being used for agricultural purposes. Further, evidences gathered by the Department from Tehsildar, and on the basis of physical verification of such land as mentioned in Tabel 1, it is seen that the land .....

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the assessee's contention that it had sufficient evidences in its possession to derive satisfaction that the land was agricultural land is also not acceptable, as discussed in preceding para. Hence, the assessee was required to deduct TDS u/s 194A of the I.T. Act in all such cases. However, the assessee has failed to deduct TDS and accordingly the assessee is deemed to be an assessee in default u/s 201(1) of the I.T. Act in respect of the amounts not so deducted. Interest u/s 201(1A) is also .....

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829182 452975 5282157 Total 49342278 2.4 Aggrieved, the assessee preferred first appeal where detailed submissions were made along with reference to various case laws. However they didn't find the favor with ld. CIT(A) who confirmed the order of the AO by following observations. "6.5 I have carefully considered the findings of the AO as also the submission of the appellant. It may be noted that the JDA has acquired various lands for its development plans on which compensation has been p .....

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ts of all the payees were obtained and both these documents confirmed that the said lands were agricultural lands. On the other hands, the AO's case is that the 'Jamabandi' reports only proved the right of ownership and that the certificate issued by Tehsildar posted in the JDA itself and who is otherwise employee o the JDA cannot be a valid evidence inasmuch as the Tehsildar was not the jurisdictional Tehsildar as also before issuing such certificate, the Tehsildar has not actually .....

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of these facts, the AO was of the opinion that such barren lands and the lands which are not being used for agricultural purposes for the last 6-7 yers cannot be said to be agricultural lands and therefore, TDS was to be deducted u/s 194LA of I.T. Act. The AO also relied on the decision of Hon'ble Kolkata High Court in the case of Tea Estates India (P) Ltd. vs. CIT 59 ITR 482 (WT) in which the Hon'ble Court has held that the agricultural land should be the land connected with the cultiv .....

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the appellant has obtained affidavit of the payees as also certificate of the Tehsildar posted in the JDA certifying that these lands were agricultural land but actual use of the land was not ascertained from the Jurisdictional Tehsildar's / Revenue authorities. It may also be noted that as per provisions of Section 194A compensation made against any immovable property other than the agricultural land is to be covered for deduction of tax but what constitutes the agricultural land is not de .....

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ion should only be considered as a agricultural land. The fact that such lands were barren or otherwise only be considered as a agricultural land. The fact that such lands were barren or otherwise not of cultivatable nature is even not disputed by the appellant. It is also fact that the appellant has relied on the 'Jamabandi' reports and did not verify the actual use of the land of agricultural purposes. It is also fact that even the AO-TDS has advised the appellant to verify the fact of .....

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orrect inasmuch as even the ITO, TDS -2, Jaipur has advised the appellant that both certificate from Tehsildar and affidavit from the payee regarding present use should be obtained but the appellant has not ensured present use of the land. Moreover, the Tehsildar posted in the JDA may not be a competent authority to report regarding actual use of the land and it is fact that before making of such payment actual use of the land was not ascertained from the Jurisdictional Tehsildar. The appellant .....

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the land situated in Municipal limits is to be treated as agricultural land and these facts are even clear from the provisions of Section 194LA. In this manner in this case law the issue as to whether what should constitute the agricultural land was not the issue. As regards the other case law relied upon the appellant in the case of ITO (TDS - 2) vs. Special Land Range Acquisition Officer, IT Appeal No. 4174 of 2009 (ITAT, Mum.). It may be mentioned that this case law are also different to the .....

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at the land was not of cultivatable nature. Moreover the finding of the Hon'ble Supreme Court as to what constitute the agricultural land cannot be altered or supersede by the findings of the Hon'ble ITAT. There is nothing on record which may indicate that the findings of Hon'ble Supreme Court has subsequently been modified or overruled by any other larger Bench of the Court. It may also be mentioned that provisions of TDS are introduced in the statute to ensure recover of tax on the .....

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ioned facts and circumstances of this case, I am of the considered view that the AO was right in holding that on compensation paid on acquiring of these lands; TDS was to be deducted as per provisions of Section 194LA of I.T. Act. Accordingly, the finding of the AO as also demand raised u/s 201(1)/ 201(1A) of I.T. Act in respect of AYs 2012-13, 2013-14, 2014-15 is confirmed. The grounds of appeal are dismissed." 2.5 Aggrieved, the assessee is before us. 2.6 The ld. Counsel for the assessee .....

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y other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon: Provided that 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 two hundred thousand rupees. Explanation.- For the purposes of this section,- (i) "agricultural land" means agricultural land in India including land situate in any area .....

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ing it as agricultural land. A plain reading of Section 194LA provides that Agricultural land means agricultural land in India including land situate in any area as mentioned above. It leads to unambiguous understanding that once the payee produces the prescribed documents about the ownership of the agricultural land for acquisition which fits into meaning as assigned in Explanation (i), no TDS is deductible on such compensation. Section 194LA does not cast any obligation on the assessee to phys .....

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ufficient to hold the agriculture land as covered in under Explanation (i) was squarely complied with by the assessee. It is trite law that the language of any taxing provision being plain and unambiguous, there is no use of further interpretation or reading some more conditions in the provisions. The letter issued by the AO is placed at page 5 of the Paper Book Volume 1 indicate that "For safety, both certificate from Tehsildar and affidavit from payee regarding present use may be obtained .....

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i) Section 194LA does not obligate the assessee to go beyond the record of agriculture and to physically verify the cultivation of crop and conducting of agricultural operation and nature of land. This is nearly impossible function which will hamper the acquisition process defeating the public interest. (ii) The AO has though accepted that some of the land girdawari has been verified and land is "Barani land" which is not agriculture land. Record is referred to the effect that "Ba .....

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enue record. Once this finding is arrived then the obligation about deducting TDS doesn't exist. Besides as per the scheme of the I T Act revenue has a remedy to enquire the tax liability in the hands of the payee about their liability for capital gains. (iv) Reliance is placed in the case of ITO .TDA-2 vs. Special Land Acquisition Officer (ITAT Mumbai Bench 'E' (2011) 12 Taxmann.com 49 wherein it has been held that "Moreover, after considering the relevant provisions of the Act .....

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decisive factor when the land itself was agricultural land though may not be used for agricultural purposes but unless and until the same was used for nonagricultural purposes it could not be said that the land could not be treated as agricultural land for the purposes of section 194LA. Even otherwise these questions were relevant only for deciding the taxability of income in the hands of the owners of the land." (v) Further reliance is placed in the case of Special Land Acquisition Office .....

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tion Officer has to only prima facie decide whether the land being acquired by him is an agricultural land or not. (3)For the purposes of determining whether the land in question is agricultural land or not the entries in the revenue records is prima facie evidence of land being agricultural land. (4)It is immaterial whether land has not been used for agricultural purposes for a long time or the land is fallow. (5)No doubt the final authority is the ITO for determining whether the land sold by t .....

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isition Officer is rebuttable and evidence can be adduced against it by the Assessing Officer but that can be done only during the assessment proceedings. (8)In the absence of any provision in section 194LA the Assessing Officer cannot enter to influence the view of the LAO on the character of a land acquired by him if he has prima facie evidence in support of the view which he has framed. There is also no provision to give any opportunity to the Assessing Officer for rebutting the presumption i .....

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in question would be agricultural land or not. That definition can be applied when the question of levy of capital gain arises before the Assessing Officer. A plain and simple reading of Section 194LA as proposed by the assessee has been held by Hon'ble Karnataka High Court in the case of Mysore Urban Development Authority & Ors vs. ITO , High Court of Karnataka, reported in 175 Taxman 307 (2008), 218 CTR (Kar.) 678 (20) wherein it was held that "The very authority also has indicate .....

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and understood and nothing more. The caption to the section which reads as "Payment of compensation on acquisition of certain immovable property" is very indicative as to for what purpose the provision has been made. One should appreciate that the liability here is an artificial liability on the person distributing the compensation in respect of immovable property as in the hands of the recipient the compensation received may be capital gain which is income taxable under the Act and t .....

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at the obligation on the part of the person to deduct is only in respect of compensation on acquisition of certain immovable properties. While agricultural land undoubtedly is an immovable property, the main part of s. 194LA itself excludes agricultural land from the immovable property covered by s. 194LA as the words in the brackets indicate, i.e. (other than agricultural land)." 2.7 The ld. DR supported the orders of the lower authorities. 2.8 The ld. Counsel for the assessee in rejoinder .....

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in default for levy of tax and interest u/s 201(1A), therefore, demands in question are untenable. It may be held that assessee is not liable for TDS in respect of acquisition of agricultural land and demand to be deleted. 2.9 We have heard the rival contentions and perused the materials available on record. From the record, it emerges that the assessee demonstrated its case for no liability of TDs before the ACIT -TDS that not only in terms of plain reading of Section 194LA but also furnished t .....

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