No TDS under section 194-IA if share of each co-owner of property was under threshold limit
Oxcia Enterprises (P.) Ltd. v. DCIT –  109 taxmann.com 19 (Jodhpur – Trib.)
Assessee-company purchased a residential property for Rs. 60.12 lakhs. The property was owned by ARK and SK jointly. The power of attorney of said property was held by VK. He executed the sale of this property on behalf of ARK and SK. The assessee deducted TDS @ 1 % of the sale consideration by quoting the PAN of VK.
Assessing Officer (AO) was of view that TDS should have been deducted in the name of the actual owners. He also found that the assessee was at fault as PAN’s of the joint owners were not mentioned. Thus, he created a demand under section 201 by taking a view that the provisions of section 206AA were applicable and TDS was deductible @ 20%. Assessee challenged the order of the AO before the CIT(A). The CIT(A) confirmed the action of the AO.
On further appeal, tribunal held that, even though the admitted position was that the assessee-buyer had not deducted tax in the hands of the joint owners of the property but still section 194-IA(2) provides an exception from TDS, when the sale consideration for the transfer of an immovable property is less than Rs. 50 lakhs. In the instant case total sale consideration was only Rs. 60.12 lakhs and consideration for each co-owner came to Rs. 30.06 lakhs each, which was below the prescribed limit. Thus, the provisions of section 194-IA were not applicable and assessee was not liable for deduction of TDS while making payment for said purchase.