Property Purchase Tax Appeal: Threshold Limit Applies Property-Wise. No TDS if Share Below Rs. 50,00,000.

The appeals challenged the order under Section 201(1)/201(IA) of the Act regarding non-deduction of tax at source on property purchase. The Tribunal held that the threshold limit of Rs. 50,00,000 under Section 194IA applies property-wise, not transferee-wise. Each transferee is considered a separate entity for tax purposes. As the assessee's share was below the threshold, no TDS was required. The Tribunal set aside the demands under Section 201(1) and 201(IA) of the Act in favor of the assessee in both cases, pronouncing the orders on 16/08/2021.

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Issues:
Appeals challenging order under Section 201(1)/201(IA) of the Act regarding non-deduction of tax at source on property purchase.

Detailed Analysis:
1. The appeals were filed against the order of ld. CIT(A) for the assessment year 2015-16, involving common grounds challenging the order passed under Section 201(1)/201(IA) of the Act. The case of the assessee in ITA No. 245/Jodh/2019 was taken as a lead case for discussion.
2. The assessee argued that as a joint owner of a property purchased for Rs. 1,26,00,000, his share was only Rs. 31,50,000, below the Rs. 50 lakh threshold in Section 194IA, hence no TDS was required. Citing previous decisions, the assessee contended that the lower authorities wrongly held him in default.
3. The Revenue argued that the assessee failed to deduct 1% TDS on his share of Rs. 31,50,000, as required under Section 194IA. The Revenue asserted that the threshold limit of Rs. 50,00,000 applies property-wise, not transferee-wise, and the assessee was correctly held in default.
4. The Tribunal referred to a previous decision where it was held that Section 194IA applies to consideration exceeding Rs. 50 lakhs, and each transferee is a separate entity for tax purposes. Considering the assessee's share of Rs. 31,50,000, which he paid in full, no TDS was required.
5. The Tribunal found that the consistent position taken by various Benches supported the assessee's position. It held that the joint owners' threshold limit should be determined individually, not collectively, setting aside the demand of Rs. 31,500 and Rs. 16,380 under Section 201(1) and 201(IA) of the Act.
6. In another identical case (ITA No. 246/JODH/2019), following the same reasoning, the Tribunal set aside the demand of Rs. 31,500 and Rs. 16,380 under Section 201(1) and 201(IA) of the Act.
7. Both appeals were allowed, and the orders were pronounced on 16/08/2021.

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