AI Drafter 
TaxTMI 
TaxTMI 
2016 (8) TMI 168
X X X X Extracts X X X X
X X X X Extracts X X X X
....idence? (II) Whether in the facts and circumstances of the case, the revenue records should have been considered and the issue regarding land acquired being agriculture land should have been decided by the authorities?" 3. The appellant is a local authority and its income was exempted upto the assessment year 2002-03 under section 10(2) of the Income Tax Act, 1961 (for short 'the Act'). The State Government acquired about 170 acres of land for which the appellant had to make payment. Before making the payment, the appellant addressed a letter dated 17.01.2005 to the Commissioner of Income Tax enquiring about the rate at which the TDS was to be deducted in respect of the amounts to be paid to Non-Resident Indians. This letter is not annexed to the appeal. What is annexed is a letter dated 25.01.2005 addressed by the Income Tax Officer in reply to the petitioner's letter. The subject of the letter is: "Rate of TDS on compulsory acquisition of land from NRIs-Regarding" By this letter the appellant was informed that under the provisions of section 195 of the Act tax was to be deducted at 30% of the compensation amount and that 2% surcharge on income tax was also deductable. What ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... compensation on acquisition of certain immovable property. 194LA. Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being 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 two 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." 6. The Income Ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the Land Acquisition Officer to deduct income tax at source if the amount of compensation is paid after October 1, 2004 and exceeds one hundred thousand rupees. The question whether a particular land is agricultural land or not is to be determined with reference to definition given in section 2(14)(iii)(a) and (b) of the Act and not with reference to the tenure of the land shown in the land revenue records. A combined reading of section 194LA and the definition of agricultural land given under section 2(14)(iii)(a) and (b) makes it abundantly clear that the competent authority to decide whether any compensation awarded is eligible to income tax is the Income Tax Officer. So it is clear that remedy available to the party is either to approach the competent authority under section 197 of the Act or pay the Income Tax and get it refunded. In the present case, the assessee having applied section 197 have deducted TDS at a particular rate and got the certificate from the AO u/s 197 of the Act, vide letter dated 25.01.2005. Now the assessee is saying that the land acquired by the assessee is agricultural land is not correct. Hence, there is no question of admission of additional evid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections.................................................., the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate. (2) Where any such certificate is given, the person responsible for paying the income shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. (2A) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (1) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith." 12. If an asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt proceedings and in the appeals before the CIT(Appeals) and the Tribunal. 16. The Tribunal further held that the assessee had made an application under section 197 and that he got a certificate from the Assessing Officer under that section vide a letter dated 25.01.2005. We had earlier referred to this letter and mentioned that it was important. What is important is that the letter was in response to an application under section 197 but only in relation to the compensation to be paid to the NRI land owners. The reply was also confined to NRIs under section 195 of the Act. No application was made under section 197 in respect of the residents of India. The order of the Tribunal, therefore, proceeds on a factually incorrect basis. 17. The decision of the Tribunal, therefore, rejecting the application for admission of additional evidence in the form of revenue records is incorrect and based on incorrect findings of law and of fact. Even assuming that the revenue records do not conclusively establish the appellant's case that the land was agricultural land, it cannot by any stretch of imagination be held that they are irrelevant. The revenue records are relevant to the issue as ....