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2015 (10) TMI 2184 - KARNATAKA HIGH COURT

2015 (10) TMI 2184 - KARNATAKA HIGH COURT - TMI - Non deduction of TDS under Section 194LA - land so surrendered by the land owner in favour of BBMP - whether there is compulsory acquisition of land? - ITAT deleted addition - Held that:- The provisions of Section 194LA would be applicable only in case of compulsory acquisition, whereas, the lands acquired by BBMP was not by way of compulsory acquisition, but had been surrendered by the land owner under Section 14B of KTCP Act.

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visions of deducting tax at source and paying it over to the Government on behalf of the recipient of payment, is in the nature of vicarious liability. When there is neither quantification of the sum payable in terms of money nor any actual payment is made in monetary terms, it would not be fair to burden a person with the obligation of deducting tax at source and exposing him to the consequence of such default. - Decided in favour of assessee. - I.T.A. No. 94 of 2015, I.T.A. No. 466 of 2015 - D .....

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tion of land or take land under Section 14B of the Karnataka Town and Country Planning Act, 1961 ['KTCP Act' for short], where the land owner may voluntarily surrender his land free of cost and handover possession of such lands and in lieu thereof, Certificate of Development Rights ['CDR' for short] are issued by the Authority, whereby, the owner would be granted CDR rights in the form of additional floor area, which shall be equal to 1½ times of area of land surrendered. .....

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ment. Consequently, after quantifying the amount of value of land so surrendered by the land owner in favour of BBMP, the Assessing officer directed that TDS at the rate of 10% under Section 194LA amounting to ₹ 2,41,91,128/- was to be deposited by the assessee. 4. An appeal filed by the respondent-BBMP was dismissed by the Commissioner of Income Tax (Appeals), which was challenged by BBMP before the Tribunal and by a detailed and reasoned order dated 14.11.2014, the appeal of BBMP has bee .....

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ash or by draft/cheque or by any other mode (in the instant case it is in the form of DRC) attracts deduction of TDS and DRC in the hands of the owner is a valuable property and marketable commodity?" 5. We have heard Sri K.V.Aravind, learned counsel for appellant-Revenue and perused the records. 6. The submission of learned counsel for appellants is that since the land was acquired by BBMP, which could be valued in terms of money under Section 50C of I.T. Act, BBMP ought to have deducted 1 .....

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ying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon:" 8. A bare .....

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ner, for which CDRs were given to the land owner. As such, we are in agreement with the finding recorded by the Tribunal that provisions of Section 194LA of I.T. Act would not be attracted in the present case. 9. Even otherwise, the Tribunal has rightly observed that the provisions of deducting tax at source and paying it over to the Government on behalf of the recipient of payment, is in the nature of vicarious liability. When there is neither quantification of the sum payable in terms of money .....

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cash, cheque, demand draft or any other mode, the question would be as to wherefrom BBMP has to deposit any amount as tax deduction at source. It is only when certain payment is made to a party, then the party making the payment, deducts a particular percentage (which u/s.194LA is 10%), which has to be deducted and deposited with the Income Tax Department. 11. If so, for example, ₹ 1.00 crore is the amount of compensation to be paid to the land owner, then instead of paying the full amount .....

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