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2018 (10) TMI 737

TDS liability u/s 195 - payments made to the non-residents / father of the non-resident - purchased an immovable property of land - levy of interest u/s 201(1)/201(1A) - Held that:- In the instant case, there was no direct payment made by the assessee to the non-residents. The entire payment was made to the resident Indian who is also the father of the non residents. The revenue did not establish that the payment has gone to the non residents. In the circumstances, we are of the considered opinion that there is no case for invoking the provisions of section 195 of the Act. - Decided in favor of assessee. - I.T.A.No.348/Viz/2016 - Dated:- 10-10-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The As .....

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ng SB A/c No.26010, Syndicate Bank, Kakinada. On finding that the assessee had purchased the property from Shri M.V.Sastry and his two non-resident sons, the AO issued the notice u/s 201/201(1A) of the Act, treating the assessee as assessee in default. In response to the notice, the assessee filed reply stating that the entire consideration of ₹ 30,74,000/- was received by Shri M.V.Sastry, the resident individual including the shares of his two non-resident sons, and no payment was made to the non resident sons, thus there is requirement to deduct the tax at source u/s 195 of the Act and the assessee has not committed any default. However, not being convinced with the reply of the assessee, the AO treated the assessee, as assessee in .....

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payments made to the non residents suffers the deduction of tax at source. In the instant case the payment was made to the resident individual. The ITAT Visakhapatnam in the case of MVV Builders in I.T (TP)A Nos.3, 4 & 5/Viz/2014 opined that the payments directly made to non-residents towards purchase of property are in the nature of any other sum chargeable to tax under the Act and attracts TDS u/s 195 of the Act. In the instant case, there was no direct payment made by the assessee to the non-residents. The entire payment was made to the resident Indian who is also the father of the non residents. The revenue did not establish that the payment has gone to the non residents. In the circumstances, we are of the considered opinion that .....

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co-owners of the land, the rights in the land were admittedly assigned to the power of attorney holder. In these circumstances, the power of attorney holder was not merely acting as an agent of the non-residents to receive money but as a person who had the right to alienate the land by the virtue of rights vested in him by the power of attorneys signed by the coowners. There is no dispute that ShriParamjit Singh had the right to sell the land in question. The question of TDS under s. 195 will only arise when payment is made by the said ShriParamjit Singh to the actual owners of land sold. There is no ambiguity about the legal position insofar as in the question as to whether the payments to the resident can be covered by s. 195 of the Act. .....

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