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2017 (5) TMI 3 - AT - Income TaxCredit of TDS u/s 199 denied - TDS deducted in the name of assessee being co-owner of the property - Held that - As AR of the assessee filed the affidavit, income tax returns alongwith computation of income and confirmation of accounts of all 18 co-owners of the property. It is also noticed from the affidavit/ declaration of 18 co-owners wherein all 18 co-owners have mentioned that they have received the rent without deduction of any tax. Thus the assessee is directed to submit the details of income tax returns alongwith computation of income and confirmation of the accounts of 18 co-owners of the property of before the AO. The AO is directed to provide adequate opportunity of being heard to the assessee in this case in accordance with law. Thus the Ground No. 1 to 3 of the assessee is allowed for statistical purposes.
Issues Involved:
1. Credit of TDS amount under Section 199 of the Income Tax Act for co-owners of a property. 2. Proportionate reduction of TDS credit. 3. Consideration of affidavits/declarations and returns filed by co-owners. Detailed Analysis: Issue 1: Credit of TDS Amount Under Section 199 of the Income Tax Act for Co-owners of a Property The appellant claimed TDS credits for amounts deducted in his name as a co-owner of a property. For the assessment years 2011-12 and 2012-13, he claimed TDS amounts of ?2,16,481 and ?2,41,855 respectively. The appellant argued that he was entitled to the entire TDS credit since he had paid the taxes on the rental income. The CIT(A) and AO, however, restricted the TDS credit proportionately based on the appellant’s share of the rental income, in accordance with Section 199 and Rule 37BA of the Income Tax Act. The Tribunal directed the appellant to submit detailed income tax returns, computation of income, and confirmation of accounts from all co-owners to the AO for verification. Issue 2: Proportionate Reduction of TDS Credit The AO allowed TDS credit only in proportion to the appellant’s share of the rental income, citing Section 199(1) and Rule 37BA. The appellant had shown a rental income of ?1,30,449 out of a total rent of ?24,78,631, with TDS of ?2,38,133 deducted by the tenant. The AO restricted the TDS credit to ?12,533, proportionate to the appellant’s share, and disallowed the excess TDS claimed. The CIT(A) upheld this decision, stating that the credit for TDS should be given to the person in whose hands the income is taxable, not necessarily to the deductee. Issue 3: Consideration of Affidavits/Declarations and Returns Filed by Co-owners The appellant submitted affidavits and declarations from the other 18 co-owners, stating that they had received the rent without any TDS deduction and had not claimed any TDS credit. These documents authorized the appellant to claim the entire TDS. The Tribunal acknowledged these submissions and directed the appellant to present detailed returns and confirmations from the co-owners to the AO. The AO was instructed to provide the appellant with an adequate opportunity to be heard and to verify the submissions in accordance with the law. Conclusion: The Tribunal remanded both appeals back to the AO for verification of the appellant’s submissions, directing the appellant to provide detailed documentation from all co-owners. The AO was instructed to reassess the TDS credit claims based on the provided evidence and to ensure compliance with the relevant provisions of the Income Tax Act. Both appeals were allowed for statistical purposes, pending further verification. Order Pronouncement: The order was pronounced in the open court on 19/04/2017.
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