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June 2025

S. 194IA – Even though the transferee’s share in the sale transaction exceeded the threshold, where the amount paid to each seller / transferor was below ₹50,00,000, the assessee was not required to deduct tax under section 194IA.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 2 mins

17. (2025) 173 taxmann.com 772 (Ahd Trib)

Archanaben Rajendrasingh Deval vs. ITO

ITA No.: 1465 (Ahd) of 2024

A.Y.: 2015-16 Dated: 2 April 2025

S. 194IA – Even though the transferee’s share in the sale transaction exceeded the threshold, where the amount paid to each seller / transferor was below ₹50,00,000, the assessee was not required to deduct tax under section 194IA.

FACTS

The assessee, along with co-owner, purchased agricultural land for a total consideration of ₹1,23,67,360, and her share in the said transaction was ₹53,67,360, which was paid in two parts to two separate sellers - ₹21,83,680 and ₹31,83,680 respectively. She did not deduct TDS on the said payments contending that the payment to each seller was below ₹50,00,000.

The AO invoked the provisions of section 194IA and held the assessee to be an assessee-in-default under section 201(1) for non-deduction of TDS and levied consequential interest under section 201(1A).

CIT(A) affirmed the action of the AO.

Aggrieved, the assessee filed an a

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