2015 (10) TMI 75

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....and salary payments. iv. short deduction of TDS on professional fee paid v. non-deduction of TDS on payments made for acquisition of land under section 194LA (Rs.1,16,57,605) vi. short deduction under section 194LA. vii. deduction of TDS under section 194C instead of 194. 2.1. The A.O. has passed an order under section 201/201(1A) of the I.T. Act, with a direction to the assessee to pay an amount of Rs. 36,14,019 for nondeduction of tax at source. Aggrieved by the order of the A.O. the GHMC had preferred an appeal before the Ld. CIT(A) on the following grounds : 1. "The order of the learned A.O. is contrary to the law and facts of the case. 2. The learned A.O. erred in ignoring the fact that the assessee is a local authority dedicated for improvement of the standards of the civil life and it do not have any commercial element in any of the activities. 3. The assessee has got proper explanations and reasons for not deducting the TDS for the A.Y.2006-07. 4. In the short notice given it is very difficult to submit the information as the matter pertains to past periods. 5. The appellant craves leave to alter, add to and / or amend the aforesaid grounds. ....

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....hen the deductor itself deducted tax at source in respect of the land component of the acquisition made under section 146 of the Hyderabad Municipal Corporation Act. 4. Any other ground that may be urged at the time of hearing." 5. The learned D.R. argued that the assessee corporation acquired some properties and paid an amount of Rs. 1,16,57,605 as compensation to three individual parties and five other parties through the First Senior Civil Judge, City Civil Court, Hyderabad towards acquisition of structures. The assessee corporation has not deducted tax on the said amount. Therefore, the A.O. assessed an amount of Rs. 13,07,983 under section 201 and Rs. 9,41,747 under section 201(1A). Further, he strongly relied on the order of the A.O. 6. On the other hand, the Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A) and relied on his order. He further contended that GHMC demolished several properties of citizens on either side of the road for the purpose of road widening in the city of Hyderabad and paid compensation. He further argued that before the demolition, the GHMC conducted negotiations/discussions with the owners and demolition took ....

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....eing in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon: Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed one hundred thousand rupees. Explanation.-For the purposes of this section,- (i) "agricultural land" means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (ii) "immovable property" means any land (other than agricultural land) or any building or part of a building.] 8.1 As can be seen from the above, the following conditions are to be satisfied before the provisions are invoked: (i) There has to be an acquisition. (ii) The acquisition must be compulsory in nature. (iii) The acquisition must be of an immovable property; and (iv) Compensation or consideration must be paid on account of a....

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....ture of the said two members. in the manner provided in Section 125. (6) No contract for the acquisition of immovable property or any interest therein or any right thereto not executed as provided in sub-section (4) shall be binding on the Corporation. (7) The foregoing provisions of this section which apply to an original contract relating to the acquisition of immovable property, or any interest therein or any right thereto shall be deemed to apply also to any variation or discharge of such contract." 8.3. As seen from the above provision, in the event of the inability of MCH to acquire any immovable property through agreement in terms of sec.146 of the HMCA 1955, a procedure has been laid out for acquiring the property through the provisions of the Land Acquisition Act, 1894, as amended from time to time, for a public purpose, in sec. 147 of the HMCA, 1955. The relevant portion of the provision, reads as under:- "147. Procedure when immovable property cannot be acquired by agreement:- (1) Whenever the Commissioner is unable to acquire any immovable property under the last proceeding Section by agreement, the Government may, in their discretion, upon the applicatio....