TMI Blog2017 (9) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... nil demand. - Held That:- When there is no tax payable by the deductee on sale of land, there is no question of charging interest u/s 201(1A) of the Act, as per instruction No.2 of 2014 dated 26.2.2014 and the circulars are binding on the Departmental officers. - Decided against assessee. - I.T.A.No.40/Vizag/2017 - - - Dated:- 6-9-2017 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri D. Balaji, AR For The Respondent : Shri S. Ravi Shankar Narayan, DR ORDER PER D.S. SUNDER SINGH, Accountant Member: This appeal filed by the assessee is directed against order of the Commissioner of Income Tax (Appeals)-10 {CIT(A)}, Hyderabad vide ITA No.0008/CIT(A)-10/2014- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. The appellant craves leave to add, alter, amend or delete any of the grounds. 2. Ground Nos.1 7 are general in nature and do not require specific adjudication. Ground No.4 is related to the contention of the assessee that the payment made to the GPA holder who is an agent of non resident and the payments made to the Dewan Housing, is not liable for deduction of TDS as per the provisions of section 195 of the Income Tax Act, 1961 (hereinafter called as 'the Act'). In the assessee s case, the assessee purchased the property from Mr. G. Satish Kumar, resident of the USA vide document No.1492 on 11.4.2011 and registered before the SRO, Vizianagaram for a sum of ₹ 34 lakhs. As per the provisions of section 195 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee has purchased the property from Shri Satish Kumar an NRI. As per the provision of I.T. Act, the assessee required to deduct the tax at source u/s 195 of the Act on the payment made to Non-resident but not deducted the tax. However, the non-resident who sold the land to the assessee has filed the return of income disclosing the long term capital gains on 14.12.2012. The A.O. charged the interest u/s 201(1A) of the Act from the date of payment made to NRI to the date of filing of the return of income by the non-resident. Accordingly, levied the interest @ 1% amounting to ₹ 1,52,938/- on the assessee. Aggrieved by the order of the A.O., the assessee went in appeal before the CIT(A) and the CIT(A) confirmed the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties, perused the materials available on record and gone through the orders of the authorities below. In the instant case, the assessee has purchased the property from Mr. G. Satish Kumar who is a non-resident. As per the provisions of section 195 of the Act, the assessee is required to deduct the tax at source on sums paid to the non-resident. However, the Central Board of Direct Taxes has issued an instruction No.2 of 2014 dated 26.2.2014 clarifying that the interest u/s 201(1A) of the Act should be restricted to the appropriate portion of the sum chargeable to tax, even in cases where there is no application made by the assessee under sub-section (2) of section 195 of the Act. For ready reference, we reproduce hereunder relevant paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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