2025 (12) TMI 282 - AT - Income Tax

No TDS or default u/s 194IA, 201(1), 201(1A) for joint purchase below Rs 50 lakhs each

The ITAT Chandigarh allowed the assessee's appeal, holding that no tax was deductible at source u/s 194IA(1) on a joint purchase of immovable property ... TDS u/s 194IA(1) - Joint purchase of property - AO was of the view that on payment of consideration more than Rs. 50 lacs, purchaser is required to deduct TDS @ 1% of the consideration - stand of the assessee is that his share was only Rs. 43,25,000/- which is less than the prescribed limit of Rs. 50 lacs and therefore, he was not supposed to deduct the TDS HELD THAT:- As decided in the case of Smt. Sandhya Gugalia, Jaipur [2018 (6) TMI 1853 - ITAT JAIPUR] as held that where property is being purchased under joint ownership and each purchaser’s share does not exceed Rs. 50 lacs, then Section 194IA is not attracted. On due consideration of this aspect, we are of the view that assessee was not under obligation to deduct TDS and therefore, he cannot be held in default u/s 201(1)/201(1A) of the Income Tax Act. Both the orders are, accordingly, quashed. The assessee appealed against the order of the Commissioner of Income Tax (Appeals) upholding the Assessing Officer's demand under sections 201(1)/201(1A) for failure to deduct tax at source under section 194-IA. The assessee had jointly purchased a flat for Rs. 86,50,000/- with another co-purchaser; the assessee's individual share was Rs. 43,25,000/-. The Assessing Officer treated the assessee as in default on the footing that 'on payment of consideration more than Rs. 50 lacs, purchaser is required to deduct TDS @ 1% of the consideration,' applying the threshold to the total sale consideration. The assessee contended that section 194-IA applies per transferee, and since his individual share did not exceed Rs. 50 lakhs, no TDS obligation arose. Reliance was placed on ITAT Jaipur in Smt. Sandhya Gugalia vs. DCIT, which held that 'where property is being purchased under joint ownership and each purchaser's share does not exceed Rs. 50 lacs, then Section 194IA is not attracted.' The Tribunal followed this reasoning, holding that the assessee 'was not under obligation to deduct TDS' and therefore could not be treated as an assessee in default under sections 201(1)/201(1A). The orders of the lower authorities were quashed and the appeal allowed.