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2016 (2) TMI 271 - KARNATAKA HIGH COURT

2016 (2) TMI 271 - KARNATAKA HIGH COURT - TMI - TDS u/s 194-IA - Payment on transfer of certain immovable property other than agricultural land - Held that:- If the provision contained in Section 194-IA as extracted noticed, the obligation on the transferee to deduct 1% of the sale consideration towards TDS had come into effect only on 01.06.2013. If that be the position, as on 02.03.2012 when the petitioner in the instant case as the transferee had paid the amount to the transferor, there was n .....

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r the taxes due. But, in the instant case, the communication as addressed from the third respondent to the first respondent could not have been held against the petitioner in the circumstance stated above. In the peculiar circumstances of the instant case, where the petitioner being an auction purchaser had paid the entire sale consideration much earlier to the provision coming into force, the endorsement dated 04.12.2013 requiring the petitioner to deduct the income tax and indicating that the .....

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te issued by the second respondent without insisting upon the deposit of the TDS amount by the petitioner herein. 2. The instant petition has arisen in a circumstance where the provision in Section 194-IA is introduced to the Income Tax Act. The provision that has been introduced with effect from 01.06.2013 reads as hereunder: 194IA: Payment on transfer of certain immovable property other than agricultural land (1) Any person, being a transferee, responsible for paying (other than the person ref .....

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or the transfer of an immovable property is less than fifty lakh rupees. (3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section. 3. The provision requires that the transferee is required to deduct 1% TDS amount from the sale consideration payable to the Transferor. On introduction of the said provision, the Income Tax Department has addressed communications to all the Sub-Registrars to see that the provision is give .....

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rsement dated 04.12.2013 intimating the petitioner that the registration can be completed only on production of proof of deduction of TDS. In that view, the document presented for registration was kept pending in No.P 5068/2013-14 to the extent of the provision requiring such deduction of TDS and the first respondent requiring the transferees to produce such proof for deduction of TDS. 4. In a normal circumstance, there can be no cavil with regard to the insistence by the first respondent. Howev .....

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operty towards recovery of their debts. Pursuant to such sale being confirmed in favour of the petitioner, the payment of the entire sale consideration of ₹ 3,08,10,000/- was made by the petitioner to the second respondent - Bank on 03.03.2012 which would enure to the credit of the borrower who is the assessee. However, the sale certificate was executed by the Bank in favour of the petitioner only on 11.09.2013 which was thereafter presented for registration. 5. In that light, if the provi .....

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n the date of presentation of the sale certificate for registration, the petitioner having parted with the sale consideration much earlier, was not expected to deduct the amount and produce proof in that regard to the Sub-Registrar. It is no doubt true that in respect of the said amount the third respondent would have the right to recover the taxes due. But, in the instant case, the communication as addressed from the third respondent to the first respondent could not have been held against the .....

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