Income tax Department id issuing notice U/s 148 based on AIR

Following principles can be drawn from CIT Vs. Sun Engineering Works (P) Ltd.(1992) 198 ITR 297(SC) 64 Taxman 442(SC):

 (a)     ITO’s jurisdiction under this section is confined only to such income which had escaped tax. It does not extend to revising, re-opening or reconsidering the whole assessment.

(b)    The assessee can not re-agitate questions decided in the original assessment proceeding.

(c)     Initiation of reassessment proceedings does not set aside the entire assessment. However the assessee can claim expenses out of that escaped income.

(d)    Those claims which are disallowed can not be re-agitated again.

 

Also ensure time limit of sending notice…..reasons should be furnished within 6yrs from the relevant assessment yr.

 

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DETAILS OF PENALTIES UNDER INCOME TAX ACT

SECTION	Nature of Failure/Default	Authority who can levy penalty	Quantum of Penalty
SECTION 158BFA(2)	a) Delay or failure in furnishing the return of total income including undisclosed income for the block period as required by notice u/s. 158BC(a) OR (b) Undisclosed Income determined by the Assessing Officer is in excess of the Undisclosed income shown in such return.	Assessing Officer or Commissioner (Appeals)	Minimum 100% & maximum 300%; in case (a) of the tax leviable in respect of the undisclosed income determined by the Assessing Officer and in case (b), of the tax leviable on the difference between the undisclosed income as determined by the Assessing Officer and the amount of undisclosed income shown in the return. (Not applicable w.e.f. 31/05/2003)
SECTION 221(1)	Default in making payment of tax within prescribed time; i.e., as required by notice u/s. 156 or wherever assessee is deemed to be in default in payment of tax.	Assessing Officer.	Such amount as directed by Assessing Officer but not exceeding the amount of tax in arrears.
SECTION 271(1)(b)	Failure to comply with the notice u/s. 115WD(2) or 115WE(2) or 143(2) or 142(1) or failure to comply with the direction u/s. 142(2A) to get the accounts audited	Assessing Officer or Commissioner or Commissioner (Appeals).	Rs. 10,000/- for each such failure.
SECTION 271(1)(c)	Concealment of particulars of income or furnishing of inaccurate particulars of such income.	Assessing Officer or Commissioner or Commissioner (Appeals).	Minimum 100% & maximum 300% of the tax sought to be evaded.
SECTION 271(1)(d)	Concealment of particulars of fringe benefits or inaccurate particulars of such fringe benefits,	Assessing Officer or Commissioner or Commissioner (Appeals).	Minimum 100% & Maximum 300% of the tax sought to be evaded.
SECTION 271(4)	Distribution of Profit by registered firm otherwise than in accordance with the partnership deed on the basis of which the firm has been registered and as a result of which partner has returned income below the real income (penalty leviable on the partner).	Assessing Officer or Commissioner (Appeals).	A sum not exceeding 150% of the difference between the tax on partner’s income assessed and income returned.
SECTION 271A	Failure to keep and maintain any such books of account and other documents as required under Section 44AA or rules made thereunder or to retain such books of account and other documents for the period specified under Income Tax Rules.	Assessing Officer or Commissioner (Appeals).	A sum of Rs. 25,000/­.
SECTION 271AA	Failure to keep and maintain any information or document in respect of international transaction as required by Section 92D(1) or (2).	Assessing Officer or Commissioner (Appeals).	2% of the value of each international transaction.
SECTION 271AAA	Undisclosed income found duringSearch initiated under section 132 on or after 1-6-2007 (Explanation to Section 271AAA)	Assessing Officer.	A sum computed @ 10% of the undisclosed income of the specified previous year. Penalty cannot be levied if all the following conditions stipulated in Section 271 AAA (2) are fulfilled. i) In the course of the search admits the undisclosed income in a statement recorded u/s.132(4) and specifies the manner in which such income has been derived. ii) Substantiates the manner in which the undisclosed income was derived and iii) Pays the taxes together with interest, in respect of such undisclosed income.
SECTION 271B	Failure to get the accounts audited as required u/s. 44AB or furnish report of such audit before the specified date mentioned in Explanation (ii) below Section 44AB.	Assessing Officer.	0.5% of the total sales, turnover or gross receipts Maximum Rs. 1,50,000/­
SECTION 271BA	Failure to furnish a report from an accountant in respect of international transaction as required u/s. 92E.	Assessing Officer.	A sum of Rs. 1,00,000/­
SECTION 271C	a) Failure to deduct whole or any part of tax at source (TDS) as required under the provisions of Chapter XVIIB or b) failure to pay whole or any part of tax u/s. 115-O or c)Failure to pay whole or any part of tax as par second proviso to section 194B	Joint Commissioner.	Amount of tax not deducted or amount of tax not so paid as the case may be.
SECTION 271CA	Failure to collect whole or any part of tax at source (w.e.f. 1st April, 2007) U/Chapter XVII-BB	Joint Commissioner.	A sum equal to the amount of tax failed to collect.
SECTION 271D	Failure to comply with the provisions of Section 269SS; i.e., by taking or accepting any loan or deposit of Rs. 20,000/- or more otherwise than by crossed account payee cheque/Draft	Joint Commissioner.	A sum equal to the amount of loan or deposit so taken or accepted.
SECTION 271E	Failure to comply with the provisions of Section 269T; i.e., repayment of any loan or deposit of Rs. 20,000/- or more otherwise than by crossed account payee cheque/draft in the name of the person who has made the loan or deposit.	Joint Commissioner.	A sum equal to the amount of loan or deposit repaid.
SECTION 271F	Failure to furnish return of income before the end of relevant assessment year as required u/ s. 139(1) or provisos to the said sub-Section.	Assessing Officer.	A sum of Rs 5,000/-.
SECTION 271FA	Failure to furnish annual information return required u/s. 285BA or failure to furnish such return within the time prescribed.	Prescribed Income Tax authority.	Rs. 100/- for every day during which failure continues.
SECTION 271FB	Failure to furnish fringe benefits return required u/s. 115WD (1) or failure to furnish such return within the time prescribed.	Assessing Officer.	Rs. 100/- for every day during which failure continues.
SECTION 271G	Failure to furnish any information or document as required by Section 92D(3) in respect of international transaction.	Assessing Officer or Commissioner (Appeals).	2% of the value of international transaction for each such failure.
SECTION 272A(1)	Failure to answer questions, sign statements or attend summons u/s. 131(1) to give evidence/ produce books of account or other documents.	Income Tax authority not lower in rank than a Joint Commissioner or a Joint Director.	Rs. 10,000/- for each such default or failure.
SECTION 272A(2)	Failure to: (a) comply with a notice u/s. 94(6); (b) give notice of discontinuance of business or profession u/s. 176(3); (c) furnish in due time any of the returns, statements or particulars mentioned in Section 133, 206 or 206C or 285B; (d) allow inspection of any register referred to in section 134 or of any entry therein or to allow copies of the same; (e) furnish return of income u/s. 139(4A)/ 139(4C) or furnish such returns within time allowed; (f) deliver copy of declaration as stated in Section 197A in due time; (g) furnish a certificate as required u/s. 203 or u/s. 206C; (h) deduct and pay tax as required u/s. 226(2); (i) furnish a statement required u/s. 192(2C); (j) to deliver in due time a copy of the declaration u/s. 206C(1A); (k) furnish quarterly statement of TDS as required u/s. 200(3) or TCS under proviso to Section 206C(3); (l) deliver the quarterly return in respect of payment of interest to residents without deduction of tax u/s. 206A(1).	Income Tax authority not lower in rank than a Joint Commissioner or a Joint Director except for failure under Clause (f) above w.r.t. Section 197A wherein the authority is with Chief Commissioner or Commissioner.	Rs.100/- per day during which default continues. However, penalty shall not exceed the amount of tax deductible or collectible in case of failure to deliver or pay declaration u/s. 197A, furnish a certificate u/s. 203 or annual return of tds/tcs u/ ss. 206 and 206C.
SECTION 272AA	Failure to comply with the provisions of Section 133B (a general survey meant for collection of information	Assessing Officer or Joint Commissioner or Assistant Director or Deputy Director.	Maximum Penalty up to Rs. 1,000/-.
SECTION 272B	Failure to comply with the provisions of Section 139A (i.e., failure to obtain PAN) or failure to quote PAN in documents and use of false PAN deliberately.	Assessing Officer.	A sum of Rs. 10,000/-.
SECTION 272BB	Failure to comply with the provisions of Section 203A (failure to obtain TAN including failure to quote the same) including quoting of false TAN.	Assessing Officer	A sum of Rs. 10,000/­.

Important Notes

1. No penalty can be levied u/s. 221(1), if the assessee proves that the default in making payment of tax was for good and sufficient reasons.

2. No order levying penalty can be passed for failure u/ss. 271(1)(b), 271A, 271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA, 271FB, 271G, 272A(1)(c)/(d), 272A(2), 272AA(1), 272B, 272BB(1)/(1A), 272BBB (1)(b), 273(1)(b), 273(2)(b)/(c). if the person or the assessee proves that there was a reasonable cause by virtue of Section 273B.

3. No penalty shall be imposed on any person unless he is properly heard or has been provided with reasonable opportunity of being heard by virtue of Section 274(1).

4. No order imposing penalty exceeding Rs. 10,000/- can be passed by the Income Tax Officer without previous approval of Joint Commissioner. Further, no order imposing penalty exceeding Rs. 20,000/- can be passed by the ACIT or DCIT without the previous approval of Joint Commissioner by virtue of Section 274(2).

5. Penalty proceedings have to be completed before the end of financial year in which the proceedings, in the course of which action for imposition of penalty is initiated, are complete, or within 6 months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later by virtue of Section 275.

6. While determining the amount of penalty, the law to be applied would be the law operative on the date when default was committed. In case of late filing of return, the default is said to be committed on the date when the return is to be filed and in case of non-compliance of notice, default is taken to be committed on the day when the date given in the notice expires.

7. An application can be made to Commissioner for reducing or waiving any penalty levied under the Income-tax Act, 1961 or for staying or compounding any proceeding for the recovery of any such penalty by virtue of Section 273A(4). In such situations, where the aggregate of such penalties exceed Rs. 1,00,000/-, then the Commissioner can exercise these powers with the previous approval of Chief Commissioner or Director-General as the case may be.

8. Explanation1 to Sec. 271(1)(c) specifies that assessee shall offer an explanation, and only on failure to offer any explanation or such explanation is found to be false, or assessee is not in a position to substantiate then it will be deemed that such person has concealed the income.

9. Explanation 4 to Sec. 271(1)(c) specifies that the amount of tax sought to be evaded also shall included reduction in the loss figure.

 

QUERIES ON IT ACT 1962 & COMPANIES ACT 1956

QUERY: The new act has done away with the clause of interested director in case of Private limited company This means that at the time of voting the interested director cannot attend the meeting and he cannot vote on the resolution. In a Pvt ltd company, where Mr X holds 40% share and wants to pass a resolution on his remuneration, commsission and other payments, Mr X will have to depend on other members holding balance share of 60%. In case Mr Y holds 33% and not a director, then how can Mr X pass this resolution?

REPLY:

The answer for the query is given below: As per the new Companies Act, 2013 also interested director cannot participate in the discussion.  The shareholding of the director is immaterial. The quorum should be disinterested quorum. (Clause 174) Naturally when the remuneration of director is decided a director cannot participate in the discussions and he has to depend upon the remaining directors’ vote for passing the resolution.   Hence if Y is a shareholder and not a director it will not affect the situation as remaining directors has to vote for the resolution. It may be possible that a private limited company may have only two directors i.e.  husband and wife and these two directors are interested in the resolution. In such a case as there is no quorum the resolution cannot be passed in the Board meeting and in the shareholders meeting the resolution has to be passed. I hope your query is answered.

QUERY: Plant & machinery purchased in the Financial year 2011-12 & put to use on 15/04/2012. Whether additional depreciation will be allowed or not pl. clarify.

 

REPLY:

Additional depreciation is charged on the block of asset in the first financial year in which the asset is put to use. Since the asset was first put to use in the year 2011-12, the assessee is entitled to get additional depreciation.

QUERY:

 Whether Service receiptant paying service tax under partial reverse charge needs to amend his service tax certificate ( Form ST 2) to register service receiving under partial reverse charge. Example – If an assesse is providing engineering consultancy services and receiving man power supply services. whether both the services should be registered and mentioned on  form ST 2 or only the Engineering consultancy services (Output Service) should be registered.

REPLY: 

You should amend the certificate to include services under partial reverse mechanism also.

In order to avoid compliance of service tax in multiple body corporate due to applicability of reverse charge, can we apply the following

Take service in one company which is already registered with the ST and transfer the same service to another body corporate entity from the former company to the later company without adding any value in the service ?

QUERY:
I have conducted an audit for a educational institutions having gross receipts of less than 1 crore, hence exempted u/s 10(23C)(iiiad) Please advise me which form under IT Act needs to be uploaded as audit report. (3CD/10B/10BB/ or any other form)

REPLY:

As the gross receipts of the institution, falling under section 10(23C) (iiiad), does not exceed Rs. 1 Crore, whole of the income is exempt from tax. Further, as the receipts is not regarded as turnover, no tax audit in form 3CD is required. However, the assessee need not file any income-tax return; but kepping in view the amount involved; the assessee should get its accounts audited so that whenever any question is raised; the answer can be given instantly. Generally; it is practice to use Form 10BB for such institutions as well.Incase you have any questions / require any clarifications, let us know, we shall be glad to assist you.

QUERY: 

One of the assessee have commercial as well as residential building. On commercial building he charged service tax by giving month service tax Invoice & depositing the same to the department but on the other hand he didn’t charges service tax on let out of residential building. What can we do charge s. tax on residential building or not?? Your early response will be highly appreciated.

REPLY:

One of the assessee have commercial as well as residential building. On commercial building he charged service tax by giving month service tax Invoice & depositing the same to the department but on the other hand he didn’t charges service tax on let out of residential building. What can we do charge s. tax on residential building or not?? Your early response will be highly appreciated.

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Company Law – How harsh effect on CA can be nullify?

We all are thinking that there is no scope to nullify harsh effect of New Company Law on CA. But i think it can be done now:

1) Clause 1(3) empowers C.G. to notify different dates for the applicability of different provisions of the Comanies Act, 2013.
2) Those provisions which are harsh on CA can be notify from say,1/4/2051.
3) In the meantime, AMENDMENTS IN THE RELEVANT SECTIONS can be done.
4) Company Rules can nullify the effect, which are yet to come, if we all collectively comment on the bill to nullify the bad effects on CA . Draft comments and link to comments has aleady been circulated in last email. Kindly check below also:

DRAFT COMMENT BY EVERY CA AND THEIR EVERY CLIENT AND STAFFS AND ARTICLE CLERKS:

1. A CA CAN BE PENALISED OR CONVICTED ONLY IF HIS CONNIVANCE WITH MANAGEMENT IN FRAUD IS PROVED.

A CA audit on sampling basis. How can he be liable for act of frauds of managements? Why he should pay penalty if income tax authority disallows some expenditure?

2. PRIVATE CO. SHOULD BE EXEMPTED FROM THE APPLICABILITY OF PROVISIONS

 OF AUDIT OF MAXIMUM OF 20 COMPANIES.

3. PROVISIONS OF ROTATION OF AUDITORS SHOULD BE APPLICABLE ONLY TO

LISTED COMPANIES, COMPANY HAVING NET-WORTH OF 500 CR. AND ABOVE OR

 COMPANY HAVING BORROWING OF 200 CR OR ABOVE

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Revenue can’t attach sum in bank account in excess of demand raised after completion of assessment: HC

IT: Revenue cannot attach entire amount standing to credit of assessee, in excess of demand raised on completion of assessment

■■■

HIGH COURT OF PUNJAB AND HARYANA

Nirmal Singh

v.

Union of India

HEMANT GUPTA AND MS. RITU BAHRI, JJ.

C.W.P. NO. 24380 OF 2011

JANUARY  29, 2013

Section 281B of the Income-tax Act, 1961 – Provisional attachment to protect revenue in certain cases [Extent of attachment] – Bank accounts of assessee were provisionally attached under section 281B – After filing of writ petition, regular assessment was framed and total tax demand was raised against assessee – Whether, where assessment had been completed, revenue was unjustified in attaching entire amount standing to credit of assessee over and above demand raised against assessee – Held, yes [Para 4] [In favour of assessee]

FACTS

■		Bank accounts of assessee were provisionally attached to protect revenue’s interest under section 231B
■		Subsequently, regular assessment was framed and total tax demand was raised against assessee.
■		The assessee filed instant writ petition claiming that amount attached standing to his credit over and above the demand raised against him should have been released by revenue on completion of assessment.

HELD

■		The argument raised by the assessee is meritorious. The bank accounts of an assessee are provisionally attached to secure the interest of the revenue pending assessment proceedings to meet the eventuality of demand of tax to be raised against such assessee. Once the assessment has been completed, the revenue would be justified to attach the account to the extent of demand raised against an assessee and not the entire amount standing to the credit of the assessee. The action of the revenue in extending the period of attachment in respect of all the bank accounts of the assessee is wholly unjustified and illegal. [Para 4]
■		Consequently, the present writ petition is allowed and the respondents are directed to release provisional attachment except to the extent of tax demand raised against the assessee. Such tax demand shall not be realized till such time, the appeal filed by the assessee is not decided by the competent authority. [Para 5]

V.K. Rana for the Petitioner. Vivek Sethi for the Respondent.

JUDGMENT

Hemant Gupta, J. – The challenge in the present writ petition is to the orders dated December 12, 2011 (annexures P.9 and P.10), whereby the bank accounts of the petitioner were provisionally attached in exercise of the powers conferred under section 281B of the Income-tax Act, 1961 (for short, “the Act”).

2. The amount of Rs. 12,13,023 as on May 27, 2011, was attached, vide annexure P.9 whereas the amount of Rs. 16,87,031 and Rs. 5,35,481 as on November 17, 2011, were attached, vide annexure P.10. Though the attachment was said to be operative for a period of two years up to December 12, 2003, in the aforesaid orders but by virtue of a subsequent corrigendum (annexure R.6), the period of attachment was corrected up to June 11, 2012. Subsequently, vide annexures P.11 and P.12, the period of attachment has been ordered to be extended by another six months and still another six months subsequently.

3. Learned counsel for the petitioner has pointed out that after the filing of the writ petition, the regular assessment has been framed on December 20, 2011, and the total tax demand raised against the petitioner is Rs. 9,62,378. Learned counsel for the petitioner vehemently argued that the provisional attachment could be operative only prior to the assessment but once assessment has been framed, the Revenue is entitled to attach the amount to the extent of demand raised and not all the bank accounts of the petitioner.

4. We find that the argument raised by the learned counsel for the petitioner is meritorious. The bank accounts of an assessee are provisionally attached to secure the interest of the Revenue pending assessment proceedings to meet the eventuality of demand of tax to be raised against such assessee. Once the assessment has been completed, the Revenue would be justified to attach the account to the extent of demand raised against an assessee and not the entire amount standing to the credit of the assessee. We find that the action of the Revenue in extending the period of attachment in respect of the all the bank accounts of the petitioner and in respect of over Rs. 33 lakhs in these circumstances is wholly unjustified and illegal.

5. Consequently, we allow the present writ petition and direct the respondents to release provisional attachment except to the extent of tax demand raised against the petitioner. Such tax demand shall not be realized till such time, the appeal filed by the assessee is not decided by the competent authority.

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Taxability on Leave Salary under Section 10(10AA) of Income Tax Act

Leave salary also known as leave encasement which means that employee will receive the cash for leaves which are not taken by the employees. Employee can encash his leaves during the course of employment but this amount will be fully taxable or he can encash at the time of retirement but the taxability of that amount depends on fulfillment of the certain conditions given under the income tax act.

Also Read Income Tax Calculation on Pension Income 

For Government Employees except local authorities leave encashment at the time of retirement is exempted from the tax u/s 10(10AA). While leave encashment during the service period is taxable for all the employees and its taxable as per the income tax slab rate which is applicable to that individual.

1. At the time of services:
   

   Amount received Fully Taxable

2. At the time of retirement:
   
   1. Government employee (central or state) – Fully exempt
   2. Non-Government employee
      

      Exempt least of the following:

• Actual Receipt
• Standard Limit=3,00,000 (maximum- reduced by an earlier exempted amount)
• Total salary of preceding 10 months from the date of retirement
• average salary of 10 months X leave credit

Calculation of Leave credit at the time of retirement

Leave entitlement- completed service X standard leave (consider max. 30 days)

Less: Leave already availed

Less: Leave encashed during the service period

Leave credit at the time of retirement

• (Leave credit should be in according to 30 days leave of every year of actual completed services)

Note: – salary= Basic pay + DA (if) + commission (%)

Average salary= (Basic pay + D.A.(if)+ % commission of 10 months immidetly @preciding from the date of retirement)/10

 

REPLIES TO QUERIES ON INCOME TAX

QUERY: Please clarify whether Tax Audit is required for Trusts, Institutions and AOP.Special care may be taken wrt ICAI guidelines,2013 on Tax Audit.

 

REPLY: Dear Sir,

As per Guidance note issued by ICAI (Revised 2013), even though certain organisations whose income are not chargeable to tax, if their turnover exceeds the limit (presently 100 lakhs), they are required to get their accounts audited under section 44AB as the said section stipulates only turnover criteria and not income criteria. 

 

A proposal for amendment in West Bengal VAT Act 2003

Presently, compulsory registration under WB VAT is required if the taxable turnover exceeds Rs. 5 Lac. In this case, a dealer is required to apply for registration within 30 days from the date on which the taxable turnover but as per section 10(3)(b) of the said act, he is liable to pay tax on all his sales of goods effected on or after the date immediately following the date on which turnover of sales exceeds the taxable quantum ( which happens to be Rs. 5lacs).

In that case, a dealer is required to pay tax out of his own pocket as he is not eligible to charge VAT from his customer since he do not have VAT no.

This is a small suggestion from my side which I think shall be fut forward to the appropriate authority to remove hardship on the part of a dealer.

I suggest that the limit for compulsory registration shall be reduced to Rs. 4Lac and liability to pay shall arise from the day on which the taxable turnover exceeds Rs. 5Lac. Although the concept has been borrowed from service tax laws where registration is mandatory where vale of services exceeds Rs. 9lacs and liability to pay tax arise when the turnover exceeds Rs. 10Lacs.

This amendment shall provide ample time to the dealer to get registered with the authorities and remove hardship of paying taxes from his own pocket.

 

Depreciation on Goodwill and Goodwill is treated as asset under section 32 of the Income Tax Act, 1961

Can assessee claim the depreciation on Goodwill or Can Goodwill is treated as asset under section 32 of the Income Tax Act, 1961.Supreme court in case of Commissioner of Income Tax, Kolkata Vs. Smifs Securities Ltd. has decided that goodwill arising post the amalgamation of two companies will be treated as Intangible asset under section 32 of Income Tax Act, 196. since one of the basic condition for finding the value of asset is “What’s the consideration paid for that asset”, So in given case assessee has taken assets & liability of other entity and issued the shares and in this whole process goodwill has arisen in the books of the company. Further explained by assessee that excess consideration paid by the assessee over the value of net assets acquired should be considered as goodwill arising on amalgamation. The assessee Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee Company stood increased. It was claimed that the extra consideration was paid towards the reputation which the Amalgamating Company was enjoying in order to retain its existing clientele

As per Explanation 3 to Section 32(1) of the Act:

• “Explanation 3.– For the purposes of this sub-section, the expressions `assets’ and `block of assets’ shall mean– [a] tangible assets, being buildings, machinery, plant or furniture;
• [b] intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature.”

Explanation 3 states that the expression `asset’ shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. A reading the words ‘any other business or commercial rights of similar nature‘ in clause (b) of Explanation 3 indicates that goodwill would fall under the expression `any other business or commercial right of a similar nature’. The principle of ejusdem generics would strictly apply while interpreting the said expression which finds place in Explanation 3(b).

Rate of TDS on Compensation on Acquisition of Immovable Property under Section 194LA

Rate of TDS on compensation on acquisition of Immovable Property under Section 194LA of Income Tax Act, 1961. Person responsible for paying i.e Acquirer of property  has to do the TDS of 10% at the time of payment of compensation. TDS to be done when consideration is less than Rs 2 Lakhs. No TDS on compensation on acquisition of agriculture property.

For the purpose of this section immovable property means any land (other than agricultural land) or any building or part of a building and agriculture land means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; (b).

Reference: Section 194LA for TDS on Payment of compensation on acquisition of certain immovable property

Payment of compensation on acquisition of certain immovable property

194LA.Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon:

Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed two hundred thousand rupees.

Explanation.—For the purposes of this section,—

(i)  “agricultural land” means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

(ii)  “immovable property” means any land (other than agricultural land) or any building or part of a building.