Adit(It)-I,, Hyderabad vs M/S Kamineni Hospitals Private ... on 25 June, 2020
7. From the above, the Ld. CIT (A) came to the conclusion that the
assessee is not bound to deduct tax at source as per provisions of
section 201(1) of the Act because the vendors / recipients were not liable
for LTCG tax since they had claimed deduction U/s. 54F of the Act by
depositing the entire sale proceeds in LTCG scheme account. The Ld.
CIT (A) further held that the assessee is also not liable to be levied
interest U/s. 201(1A) of the Act because there is no failure on the part
of the assessee to deduct tax at source and remit the same to the
Government treasury. Further, if the assessee had deducted tax at
source and remitted to the Government treasury then the Revenue
would have been bound to refund the TDS to the vendors with interest
U/s. 244A of the Act since the vendors do not have any liability towards
LTCG tax by virtue of their claim of deduction U/s. 54F of the Act.
Reliance was placed in the decision of Thomas Muthoot vs. DCIT
reported in 150 TTJ 665. For the above stated reasons, the Ld. CIT (A)
deleted the levy of interest U/s. 201(1) of the Act of Rs. 35,64,418/-.