Separate sale deeds below threshold defeat TDS under property transfer rules; labour payment issue sent back for verification.

Tax deduction under section 194IA is tested with reference to each independently executed sale deed and the consideration stated in that document; where three plots were conveyed by separate registered deeds and each individual consideration was below the statutory threshold, tax was not deductible and the buyer was not treated as an assessee in default. The labour-payment disallowance under section 194C turned on whether any individual payment crossed the deduction threshold, and because the payment evidence was incomplete, the matter required fresh verification by the assessing authority after giving the assessee an opportunity to produce supporting records.

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Issues: (i) Whether tax was deductible under section 194IA of the Income-tax Act, 1961 on the purchase of three plots where each registered sale deed reflected consideration below the monetary threshold though the seller and Khasra numbers were common; (ii) Whether the labour-payment disallowance for alleged non-deduction of tax under section 194C of the Income-tax Act, 1961 required fresh verification in the absence of supporting payment details.

Issue (i): Whether tax was deductible under section 194IA of the Income-tax Act, 1961 on the purchase of three plots where each registered sale deed reflected consideration below the monetary threshold though the seller and Khasra numbers were common.

Analysis: The provision applied where the consideration for transfer of an immovable property was not less than the prescribed amount. The three plots were registered on different dates, and the consideration stated in each sale deed was below the threshold. The common seller and identical Khasra numbers did not alter the fact that each transfer was separately documented and each individual consideration remained below the statutory limit.

Conclusion: Tax was not deductible under section 194IA on the facts found, and the assessee could not be treated as an assessee in default.

Issue (ii): Whether the labour-payment disallowance for alleged non-deduction of tax under section 194C of the Income-tax Act, 1961 required fresh verification in the absence of supporting payment details.

Analysis: The labour-payment dispute turned on whether any individual payment exceeded the statutory limit attracting deduction at source. As the assessee had not furnished adequate evidence before the first appellate authority, the matter required one more for substantiation and factual examination by the assessing authority.

Conclusion: The issue was restored to the assessing authority for fresh adjudication after giving the assessee an opportunity to produce evidence.

Final Conclusion: The challenge to TDS on the land purchases succeeded, while the labour-payment issue was sent back for reconsideration, resulting in partial relief to the assessee.

Ratio Decidendi: For deduction of tax at source under section 194IA, the statutory threshold must be tested with reference to each independently executed transfer document and the consideration stated therein; where factual verification is incomplete on another TDS issue, fresh adjudication with adequate opportunity is warranted.

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