M/s Sami Reality & Infrastructure P. Ltd.,, Mangalore v. Asst. DIT, Mandya

ITA 970/BANG/2014 | 2012-2013
Pronouncement Date: 14-11-2014 | Result: Allowed

Appeal Details

RSA Number 97021114 RSA 2014
Assessee PAN AEBPM6716Q
Bench Bangalore
Appeal Number ITA 970/BANG/2014
Duration Of Justice 3 month(s) 20 day(s)
Appellant M/s Sami Reality & Infrastructure P. Ltd.,, Mangalore
Respondent Asst. DIT, Mandya
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 14-11-2014
Assessment Year 2012-2013
Appeal Filed On 24-07-2014
Judgment Text
SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH BANGALORE BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI JASON P. BOAZ ACCOUNTANT MEMBER S.P. NO.223/BANG/2014 (ARISING OUT OF ITA NO.971/BANG/2014) (ASSESSMENT YEAR: 2012-13) SRI A. MOHIUDDIN NO.202 VEEKAY TOWERS KULUR BANGRA ROAD KULUR MANGALORE 575 013 PAN: AEBPM 6716 Q VS. ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MANGALORE (APPELLANT) (RESPONDENT) S.P. NO.224/BANG/2014 (ARISING OUT OF ITA NO.972/BANG/2014) (ASSESSMENT YEAR: 2012-13) MRS. SHAHANAZ MOHIUDDIN NO.202 VEEKAY TOWERS KULUR BANGRA ROAD KULUR MANGALORE 575 013 PAN: AIFPM 7608 B VS. ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MANGALORE (APPELLANT) (RESPONDENT) S.P. NO.225/BANG/2014 (ARISING OUT OF ITA NO.970/BANG/2014) (ASSESSMENT YEAR: 2012-13) M/S. SAMI REALITY & INFRASTRUCTURES PVT LTD NO.202 VEEKAY TOWERS KULUR BANGRA ROAD KULUR MANGALORE 575 013 PAN: AANCS 8684 A VS. ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MANGALORE (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI V. SRINIVASAN CA DEPARTMENT BY: DR. SHANKAR PRASAD (DR) DATE OF HEARING: 14/11/2014 DATE OF PRONOUNCEMENT: 14/11/2014 SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 2 OF 10 O R D E R PER BENCH: THE PRESENT STAY APPLICATIONS ARE DIRECTED AT THE INSTANCE OF THE APPELLANTS FOR GRANT OF AD INTERIM STAY OF THE OUTSTANDING DEMAND DURING THE PENDENCY OF APPEALS. HOWEVER WHI LE GOING THROUGH THE RECORD WE DEEM IT APPROPRIATE TO HEAR THE APPEALS ITSELF BECAUSE THE ISSUE INVOLVED IN ALL THE THREE APPEALS IS COMMON AND COVERED BY THE DECISION OF THE HON'BLE S UPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY VS. CIT RE PORTED IN 327 ITR 156 AND 193 TAXMAN 234 R.W. INSTRUCTION NO.2/20 14 DATED 26.02.2014 ISSUED BY THE BOARD. THEREFORE WITH THE CONSENT OF BOTH THE REPRESENTATIVES WE HEARD THE APPEALS ITSE LF. 2. THE COMMON QUESTION INVOLVED IN ALL THE APPEALS IS WHETHER THE APPELLANTS CAN BE TREATED IN DEFAULT FOR NOT DE DUCTING THE TDS WHILE MAKING PAYMENTS TO THE NON RESIDENT MRS.Z OHRA MOIDIN RESULTING THE DEMAND OF TAX AGAINST THE ASS ESSEES AS WELL AS INTEREST U/S 201(1A) OF THE INCOME TAX ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT MR. AHMED M OHIUDDIN AND MRS. SHAHANAZ MOHIUDDIN ARE THE DIRECTORS OF TH E COMPANY M/S SAMI REALITY AND INFRASTRUCTURES (P) LTD. THEY HAVE JOINTLY EXECUTED A PURCHASE DEED ON 16.09.2011 WITH THE VEN DORS OF THE PROPERTY AT MANGALORE WHICH WAS JOINTLY OWNED BY MR S. ZOHRA MOIDIN AND MRS. SAYEEDA AMIR ALI. THE PROPERTY WAS PURCHASED FOR A CONSIDERATION OF RS.2 57 24 000. THE DISPUTE IS THAT MRS. ZOHRA MOIDIN IS A NON RESIDENT AND BEFORE MAKING PA YMENT TO SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 3 OF 10 HER THE TDS U/S 195(1) OUGHT TO HAVE BEEN DEDUCTED BY THE ASSESSEE. SINCE THEY FAILED TO DEDUCT THE TDS THER EFORE THEY ARE ASSESSEE IN DEFAULT AND A NOTICE U/S 201 WAS SERV ED UPON THE ASSESSEE. THE CONTENTION OF THE ASSESSEES BEFORE TH E LEARNED ASSTT. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATI ON) WAS THAT AT THE TIME OF EXECUTION OF SALE DEED AND PAYMENTS OF CONSIDERATION IT WAS REPRESENTED BY MRS. ZOHRA MOIDUM THAT SHE HA D PURCHASED A HOUSE PROPERTY ON 24.5.2011 WHICH IS WI THIN ONE YEAR PRIOR TO THE DATE OF SALE DEED BEING EXECUTED 16.09.2011. SHE HAS REPRESENTED THAT THE CONSIDERATION PAID FOR ACQUISITION OF RESIDENTIAL HOSUE WAS OF RS.1.50 CRORES AND THE COST OF STAMP PAPER AND REGISTRATION CHARGES WAS A SUM OF RS.12 3 0 475/-. THUS SHE HAD MADE INVESTMENT IN THE NEW RESIDENTIA L HOUSE AT RS.1 62 30 475/- WHICH WAS ELIGIBLE FOR EXEMPTION U /S 54 OF THE INCOME TAX ACT. THUS ACCORDING TO THE ASSESSEE IN THE PAYMENTS MADE BY THEM THE NATURE OF INCOME CHARGEABLE TO TA X OUGHT TO BE EMBEDDED ONLY THEN THEY ARE REQUIRED TO DEDUCT THE TDS SINCE NO SUCH INCOME WAS EMBEDDED UPON WHICH THE TA XES ARE TO BE LEVIED. THEREFORE THEY HAVE NOT DEDUCTED THE TD S. 4. THE LEARNED ASSESSING OFFICER HAS OBSERVED THAT SECTION 195 CONTAIN IN ITSELF A PROCEDURE WHERE AN ASSESSEE FEELS NECESSITY OF ANY CLARIFICATION ON ACCOUNT OF NON DE DUCTION OF TAXES HE CAN MOVE AN APPLICATION U/S 195(2) OR 195 (3). SECTION 195(1) MANDATE THE ASSESSEE TO DEDUCT THE TDS WHILE MAKING PAYMENT TO ANY NON RESIDENT. WITH REGARD TO ASSESSE ES CONTENTION THAT ELEMENT OF INCOME OUGHT TO BE INVOL VED IN THE PAYMENT IS CONCERNED THE LEARNED ASSESSING OFFICER HAS OBSERVED THAT THERE IS A PERCEPTIONAL DIFFERENCE BE TWEEN SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 4 OF 10 CONSTRUCTION OF THIS EXPRESSION AVAILABLE IN SECTIO N 195(1) OF THE ACT THE EXPRESSION SUM CHARGEABLE TO TAX IS NOT DEPENDENT UPON THE ULTIMATELY PAYMENT OF TAX BY THE RECEIPIEN T. THERE CAN BE SO MANY REASONS WHERE RECEIPIENT CAN BE EXEMPTE D FROM PAYMENT OF TAXES LIKE DEDUCTION EXEMPTION ETC. BU T THE ELEMENT OF INCOME IN THE PAYMENT IS INVOLVED. THE ASSESSING OFFICER HAS EMPHASIZED THAT ON SALE OF THE HOUSE PROPERTY CAPI TAL GAIN TAX WOULD BE CHARGEABLE IN THE HANDS OF THE RECEIPIENT THEREFORE THE ELEMENT OF INCOME IS QUITE INVOLVED IN THE PAYMENT. IT IS A DIFFERENT MATTER THAT THE RECEIPIENT WAS ENTITLE FO R EXEMPTION U/S 54. IN THIS WAY THE ASSESSING OFFICER HAS HELD THE ASSESSEES IN DEFAULT AND RAISED A DEMAND U/S 201. HE ALSO CHARGE D INTEREST U/S 201(1A). 5. APPEALS TO THE CIT (A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 6. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE P LACED ON RECORD COPY OF THE ASSESSMENT ORDER PASSED IN THE C ASE OF MRS. ZOHRA MOIDIN. HE ALSO PLACED ON RECORD COPY OF THE CIRCULAR NO.2/2014 ISSUED ON 26.02.2014. HE POINTED OUT THAT AFTER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GE INDIA TECHNOLOGY (P) LTD (SUPRA) THE TDS IN THE PAYMENTS REQUIRED TO BE MADE U/S 195(1) OUGHT TO BE DEDUCTED IF THE ELE MENT OF INCOME IN SUCH PAYMENT IS INVOLVED. THE BOARD HAS C ONSIDERED THIS ASPECT AND THEREAFTER LAID DOWN THE GUIDELINES . THE BOARD HAS APPRIASED ITS OFFICERS THAT WHILE TREATING ANY ASSESSEE IN DEFAULT U/S 201 OF THE ACT AND DETERMINATION OF APP ROPRIATE PORTION OF THE SUM WILL DEPEND ON THE FACTS AND CIR CUMSTANCES OF SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 5 OF 10 EACH CASE TAKING INTO ACCOUNT THE NATURE OF REMITAN CE. IN THIS CASE THE VENDORS HAVE MADE INVESTMENT IN HOUSE PROP ERTY IN THE MONTH OF MAY 2011. THIS INVESTMENT WAS MADE WITHIN THE WINDOW PERIOD FOR CLAIMING EXEMPTION U/S 54 OF THE ACT. THEREFORE WHEN THEY SOLD THE PROPERTY THEY WERE AW ARE THAT THE AMOUNT WHICH THE VENDORS ARE RECEIVING WILL NOT BE CHARGED TO CAPITAL GAIN TAX. THE ASSESSEE WAS ALSO AWARE THAT THE PAYMENTS DOES NOT INVOLVE ANY SUM UPON WHICH TAXES WOULD BE LEVIED. IN SUCH SITUATION THE ASSESSEE CANNOT BE TREATED IN D EFAULT U/S 201 OF THE INCOME TAX ACT. 7. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ASSESSMENT ORDER. HE POINTED OUT THAT THERE IS A BA SIC DIFFERENCE BETWEEN THE TAXES REQUIRED TO BE PAID ULTIMATELY BY AN ASSESSEE VIS--VIS THE INCOME ACCRUED OR ARISING TO SUCH AN ASSESSEE. IN THE PAYMENTS MADE BY THE ASSESSEES THE ELEMENT OF INCOME WAS VERY MUCH THERE. IT IS A DIFFERENT MATTER THAT THE VENDORS HAVE MADE INVESTMENT THEREFORE THAT WOULD QUALIFY FOR EXEMPTION UNDER OTHER SECTIONS OF THE INCOME TAX ACT. HE FURT HER POINTED OUT THAT HAD THE VENDORS HAVE NOT PURCHASED IN THE MONTH OF MAY 2011 AND THEY HAD INTENTION TO PURCHASE IN SUB SEQUETN YEAR WITHIN THE LIMITATION PROVIDED IN SECTION 54 THEN WHAT WOULD BE THE SITUATION. THE ASSESSEES OUGHT TO HAV E DEDUCTED THE TAX IN THAT CIRCUMSTANCE. THUS THE ASSESSEES O UGHT TO HAVE NOT TAKEN A DECISION AT THEIR OWN LEVEL. THEY SHOUL D HAVE APPROACEHD THE INCOME TAX OFFICER U/S 195(2) OR 195 (3). 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WE APPRECIATE THE APP ROACH OF THE SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 6 OF 10 LEARNED ASSESSING OFFICER THAT ULTIMATE PAYMENTS OF TAX BY THE RECEIPIENT MAY NOT BE THE CRITERIA FOR ARRIVING AT A CONCLUSION; WHETHER THE PAYMENTS INVOLVED ELEMENT OF TAXES OR N OT. THE ULTIMATE LEVY OF TAXES IS DEPENDENT UPON MANY CIRCU MSTANCES SUCH AS EXEMPTION DEDUCTION ETC. HOWEVER IN THE P RESENT CASE WHEN THE APPELLANTS HAVE MADE PAYMENTS THEY WERE S URE BECAUSE OF THE FACTS BROUGHT TO THEIR NOTICE THAT T HESE PAYMENTS DOES NOT INVOLVE PAYMENT OF TAXES. THE VENDOR IS EN TITLED FOR EXEMPTION. THERE COULD BE A CIRCUMSTANCE; WHERE VEN DORS HAVE SOME OTHER CAPITAL GAIN WHICH COULD BE ADJUSTED AGA INST THE INVESMENT IN HOUSE PROPERTY? BUT THE VENDORS ARE T HE FAMILY MEMBERS. THEY HAVE APPRISED THE ASSESSEES ABOUT TH E INVESTMENT. THEY MUST HAVE POINTED OUT THAT NO LIAB LITY OF TAXES WOULD BE THERE. THEREFORE NO NEED TO DEDUCT THE TD S. THE FACTS OF THE PRESENT CASE OUGHT TO BE SEEN BY THE LEARNED CIT (A) IN THE LIGHT OF THE CIRCULAR ISSUED BY THE BOARD BECAUSE B EFORE THE ASSESSING OFFICER THE CIRCULAR WAS NOT IN THE PICTU RE. THE CIRCULAR READ AS UNDER: INSTRUCTION NO. 02/2014 DATED 26.02.2014 SUB: DEDUCTION OF TAX AT SOURCE UNDER SECTION 195 READ WITH SECTIONS 201 OF THE INCOME-TAX ACT 1961 RELATING TO PAYMENT MADE TO A NON-RESIDENT-REG. SECTION 195 OF THE INCOME-TAX ACT (HEREAFTER REFERR ED TO AS THE ACT) PROVIDES THAT ANY PERSON RESPONSIBLE FOR PAYING TO A NON-RESIDENT NOT BEING A COMPANY OR TO A FOREIGN COMPANY ANY SUM CHARGEABLE UNDER THE PROVISIONS OF THIS ACT SHALL AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME O F PAYMENT THEREOF WHICHEVER IS EARLIER DEDUCT INCOM E- TAX THEREON AT THE RATES IN FORCE. SECTION 201 OF T HE ACT INTER ALIA PROVIDES THAT ANY PERSON WHO IS REQUIRED TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 7 OF 10 ACT DOES NOT DO SO SHALL HE DEEMED TO BE AN ASSES SEE IN DEFAULT AND SHALL ALSO BE LIABLE TO PAY SIMPLE INTEREST AT THE SPECIFIED RATE. 2. REFERENCES WERE RECEIVED FROM FIELD OFFICERS ON THE ISSUE OF DEDUCTION OF TAX AT SOURCE UNDER SECTION 1 95 OF THE INCOME-TAX ACT 1961 IN THE LIGHT OF THE DECISI ONS OF THE SUPREME COURT OF INDIA IN THE CASE OF GE INDIA TECHNOLOGY PRIVATE LIMITED VS. CIT 327 (ITR) 456 AND T RANSMISSION CORPORATION OF AP LIMITED AND ANOTHER VS. CIT (1999) 299 (1TR) 587 AND THE DECISION OF THE MADRAS HIGH COURT IN CIT VS. CHENNAI METROPOLITAN WATER TAX CASES APPEALS NOS.500- 501 OF 2005 WITH A REQUEST FOR CLARIFICATION AS TO WHETHER THE TAX IS TO BE DEDUCTED UNDER SUBSECTION (1) OF SECTION 195 ON THE WHOLE SUM BEING REMITTED TO A NON-RESIDENT OR ONLY THE PORTION REPRESENTING THE S UM CHARGEABLE TO TAX PARTICULARLY IF NO APPLICATION H AS BEEN MADE UNDER SUBSECTION 2) OF SECTION 195 OF THE ACT TO DETERMINE THE SUM. 3. THE MATTER HAS BEEN EXAMINED IN THE BOARD AND ACCORDINGLY IN EXERCISE OF POWERS VESTED UNDER SEC TION 119 OF THE ACT THE BOARD HEREBY DIRECTS THAT IN A CASE WHERE THE ASSESSEE FAILS TO DEDUCT TAX UNDER SECTIO N 195 OF THE ACT THE ASSESSING OFFICER SHALL DETERMI NE THE APPROPRIATE PROPORTION OF THE SUM CHARGEABLE TO TAX AS MENTIONED IN SUBSECTION (1) OF SECTION 195 TO ASCER TAIN THE TAX LIABILITY ON WHICH THE DEDUCTOR SHALL BE DE EMED TO BE AN ASSESSEE IN DEFAULT UNDER SECTION 201 OF T HE ACT AND THE APPROPRIATE PROPORTION OF THE SUM WILL DEPEND ON THE FACTS AND CIRCUMSTANCES OF EACH CASE TAKING INTO ACCOUNT NATURE OF REMITTANCES INCOME COMPONENT THEREIN OR ANY OTHER FACT RELEVANT TO DETERMINE SUCH APPROPRIATE PROPORTION. 4. THE UNDERSIGNED IS DIRECTED TO STATE THAT THE AB OVE POSITION MAY BE BROUGHT TO THE NOTICE OF ALL OFFICE RS CONCERNED. F. NO. 500/33/2013-FTD-I YOURS FAITHFULLY (SATYA PAL KUMAR) UNDER SECRETARY-1(2) [FT&TR-L] SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 8 OF 10 9. IF WE EXAMINE THE FACTS OF THE PRESENT CASE IN T HE LIGHT OF PARAGRAPH NO.3 OF THE CIRCULAR THEN IT COULD INDIC ATE THAT THE ASSESSING OFFICER IS REQUIRED TO DETERMINE THE APPR OPRIATE PROPORTION OF THE SUM CHARGEABLE TO TAX AS MENTIONE D IN SUB- SECTION (1) OF SECTION 195 TO ASCERTAIN THE TAX LIA BILITY ON WHICH THE DEDUCTOR SHAL BE DEEMED TO BE AN ASSESSEE IN DE FAULT U/S 201 OF THE ACT AND THE APPROPRIATE PROPORTION OF TH E SUM WILL DEPEND ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. IN THE PRESENT CASE FROM THE DATE OF THE PAYMENT VENDEES W ERE AWARE THAT THE AMOUNT WILL QUALIFY FOR EXEMPTION U/S 54 B ECAUSE THE VENDORS HAS ALREADY MADE INVESTMENT IN PURCHASE OF THE HOUSE PROPERTY. SHE HAS REPRESENTED THESE FACTS TO THE AS SESSEE. AT THIS STAGE IT IS PERTINENT TO MAKE REFERENCE OF THE ASS ESSMENT ORDER PASSED IN THE CASE OF SMT. ZOHRA MOIDIN U/S 143(3). THE RELEVANT PART READ AS UNDER: 3. DURING THE CORUSE OF PROCEEDINGS IT HAS BEEN OBSERVED THAT THE ASSESSEE ALONG WITH HER SISER MRS . SAIDA AMIR ALI HAD SOLD IMMOVABLE PROPERTIES INHERI TED FROM HER FATHER FOR A TOTAL SALE CONSIDERATION OF RS.2 57 24 000/- DURING THE RELEVANT PREVIOUS EYAR. THE TRANSCTIONS WERE REGISTERED VIDE TWO SALE DEEDS BOT H DATED 16.09.2011 (REGD. AS DOC. NO.5062 AND DOC. NO.5065) IN RESPECT OF LAND TO THE EXTENT OF 6.9750 ACRES AND RESIDENTIAL BUILDING WITH APPURTENANT LAND MEASURING 1.73 ACRES RESPECTIVELY. AS PER THE AFFID AVIT SUBMITTED BY THE ASSESSEE SHE HAD 2/3 RD RIGHT IN THE SAID PROPERTIES AND HER SISTER MRS. SAIDA AMIR ALI HAD 1/3 RD RIGHT. THE PROPERTY COMPRISING LAND ONLY HAS BEEN SOLD FOR A CONSIDERATION OF RS.2 00 00 000/- AND TH E SECOND PROPERTY COMPRISING RESIDENTIAL BUILDIGN AND LAND HAS BEEN SOLD FOR A CONSIDERATION OF RS.57 24 000/-. THE TOTAL CAPITAL GAINS HAS BEEN SH OWN AT RS.2 25 55 466/- AFTER CLAIMING EXPENSES INCURRE D FOR CONVERSION FEES AND BROKERAGE TO THE EXTENT OF RS.8 00 000/- AND INDEXED COST OF ACQUISITION OF SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 9 OF 10 RS.23 68 534/-. THE ASSESSEE HAS DECLARED HER SHARE (2/3) OF LTCG AT RS.1 50 36 977/-. AS SHE HAS PURCHASED A RESIDENTIAL HOUSE WITH LAND FOR RS.1 50 00 000/- WITHIN ONE YEAR (ON 26.05.2011) BEFORE THE DATE OF SALE (16.09.2011) OF THE SAID PROPERTIES FOR WHICH SHE HAS INCURRED STAMP AND REGISTRATION CHARGES OF RS.12 30 475/- SHE HAS DECL ARED THE TOTAL COST OF THE NEW ASST AT RS.1 62 30 475/- AND CLAIMED THE ENTIRE AMOUNT OF HER SHARE OF LTCG OF RS.1 50 36 977/- AS EXEMPT U/S 54 AND 54F. 4. AFTER CONSIDERING THE DETAILS FURNISHED AND THE SUBMISSIONS OF THE ASSESSEE THE ASSESSMENT IS CONCLUDED BY ACCEPTING THE INCOME AS PER THE RETURN FILED ON 31.07.2012. 5. SUBJECT TO THE ABOVE REMARKS AND THE DATA MADE AVAILABLE THE TOTAL INCOME AND TAX PAYABLE BY THE ASSESSEE IS COMPUTED AS UNDER: LONG TERM CAPITAL GAINS NIL TOTAL INCOME NIL LESS: PRE-PAID TAXES NIL BALANCE REFUNDABLE/PAYABLE NIL 10. THE ABOVE FACTS INDICATE THAT FROM THE DATE OF PAYMENTS PARTIES WERE AWARE THAT THESE PAYMENTS WOULD NOT BE SUBJECT TO TAXES BECAUSE OF EXEMPTION. THEREFORE THERE WAS N O NEED TO DEDUCT THE TAXES. IN VIEW OF THE ABOVE FACTS WE AL LOW ALL THE THREE APPEALS AND HOLD THAT THE APPELLANTS CANNOT B E TREATED AS ASSESSEE IN DEFAULT U/S 201. CONSEQUENTLY NO INTERE ST U/S 201(1A) WILL BE IMPOSABLE UPON THEM. 11. SINCE WE HAVE DECIDED THE APPEALS THEREFORE T HE STAY APPLICATIONS BECOME REDUNDANT AND DISMISSED. SA 223 TO 225 AND ITA NOS.970 TO 972 OF 2014 A.MOHI UDDIN & OTHERS PAGE 10 OF 10 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER 2014. SD/- SD/- (JASON P. BOAZ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 14 TH NOVEMBER 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES BANGALORE