TaxTMI 
TaxTMI 
2018 (10) TMI 737
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....uction of tax at source and payments made to the non-residents and consequent levy of interest u/s 201(1)/201(1A) of the Income Tax Act, 1961 (herein after called as 'Act'). 3. Brief facts of the case are that the assessee has purchased an immovable property of land admeasuring 399.71 sq.yards located at D.No.67-3-14/2, Kakinada, East Godavari Dist., from Shri Marla Veerabhadra Sastry (Shri M.V.Sastry), father and his two non resident sons namely Shri Marla Vishnu Tej and Shri Marla Krishna Tej residents of U.S.A. The sale transaction was represented by Shri M.V.Sastry as a General Power of Attorney (GPA)holder for both Shri Marla Vishnu Tej and Shri Marla Krishna Tej. Shri M.V.Sastry was given GPA by both the non-resident sons on 21.03.....
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....@2% and secondary and higher educational cess @1% and interest @1%p.m. and the details are as under : Amount Paid (Rs.) Tax deductible @20.60% (Rs.) No. of months for which interest u/s 201(1A) is payable from April 2008 to Feb' 2013 Interest u/s 201(1A) @ 1% p.m. Total amount payable (Rs.) 20,49,330 4,22,160 59 2,49,070 6,71,230 4. Aggrieved by the order of the AO, the assessee went on appeal before the Ld.CIT(A) and the Ld.CIT(A) confirmed the order of the AO. 5. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. We have heard both the parties and perused the material placed on record. In this case, the assessee had purchased the property from Shri M.V.Sastry ....
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....er of the Coordinate Bench which reads as under : "We have heard the rival submissions, perused the orders of the lower authorities and the materials available on record. We find in the case before us that the payment has been made to an individual resident in India i.e., Shri Paramjit Singh. This payment has been made in respect of purchase of land which belongs to the non-residents but the rights therein were assigned unequivocally to the power of attorney holder. The agreement has been entered into with the power of attorney holder and it is not a case that the payment has been made to Shri Paramjit Singh as a representative nominated by the nonresident. No doubt, when non-resident himself nominates a particular agent to whom pa....
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....e invoked. A Co-ordinate Bench of this Tribunal in Tecumesh Products (I) Ltd. vs. Dy. CIT (2007) 13 SOT 489 (Hyd), has even held that when a payment is made to resident even on behalf of the nonresident, the provisions of s. 195 of the Act do not apply. If such be the esteemed views of a Co-ordinate Bench, it is futile to suggest that merely because payment is made to a resident, in respect of a property which has legal ownership by non-residents, the provisions of s. 195 of the Act will apply. In view of this discussion and bearing in mind entirety of the case, we are of the considered view that the payment of Rs. 13.12 lakhs made by the assessee to Shri Paramjit Singh, on the facts of this case cannot be considered as payment made to non-....