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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & MS. KAVITHA RAJAGOPAL, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 28/Mum/2023 (Assessment Year: 2018-19)
M/s. Anant Singhania HUF Income Tax Officer, 17(1)(1) 1st Floor, New Hind House, 3 Mumbai N. M. Marg, Ballard Estate, Vs. Mumbai-400 001
PAN/GIR No. AAKHA 0557 L (Appellant) (Respondent) :
Assessee by : Shri Dharan Gandhi Revenue by : Shri Manoj Kumar Sinha
Date of Hearing : 08.03.2023 Date of Pronouncement : 07.06.2023
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2018-19.
The assessee has challenged the non granting of TDS credit amounting to Rs.15 lacs by the Assessing Officer (A.O. for short) and upheld by the ld. CIT(A).
The brief facts of the case are that the assessee is an HUF and had filed return of income dated 14.08.2018, declaring total income at Rs.36,18,374/-. The assessee’s case was selected for limited scrutiny under the e-assessment scheme of 2019 on the issue of
2 ITA No. 28/Mum/2023 (A.Y.2018-19) M/s. Anant Singhania HUF vs. ITO
capital gains deduction claimed by the assessee. The A.O. passed the assessment order
u/s. 143(3) r.w.s. 143(3A) and 143(3B) of the Act where the return income of the
assessee was accepted by the A.O. vide order dated 28.08.2020. The A.O. in the
computation of the income sheet had denied the TDS credit u/s. 194IA of the Act
amounting to Rs.15 lacs on sale of house property and had also levied interest u/s. 234B
and 234C of the Act amounting to Rs.4,40,191/- and Rs.69,223/- respectively.
Aggrieved, the assessee was in appeal before the ld. CIT(A) who had allowed the
credit of TDS by remanding it back to the A.O. with a direction to the assessee to follow
the procedure prescribed under Rule 37BA(2) of the Income Tax Rules for the purpose of
allowing the credit of TDS.
The assessee is in appeal before us, challenging the order of the ld. CIT(A).
The learned Authorised Representative (ld. AR for short) for the assessee
contended that the A.O. has accepted the return of income filed by the assessee but had
denied TDS credit in the computation sheet where the TDS is reflected in the individual
name. The ld. AR further stated that the share of income from partition was assessed in
the hands of Shri Anand Singhania in his individual capacity, which was subsequently
shown as ‘income’ in the returns filed by Shri Anand Singhania, HUF the assessee. The
ld. AR for the assessee stated that the sale of property belonging to HUF was shown in
the books of HUF and capital gains on the said sale was offered to tax in the hands of the
assessee HUF but TDS deduction reflected in 26AS of Shri Anand Singhania as the
buyer deducted tax in the name of Shri Anand Singhania for the reason that he was the
3 ITA No. 28/Mum/2023 (A.Y.2018-19) M/s. Anant Singhania HUF vs. ITO
registered owner of the properties. The ld. AR for the assessee stated that all these details
were furnished before the lower authorities but was not considered. The ld. AR relied on
the decision of the Hon’ble Gujarat High Court in the case of Naresh Bhavani Shah
(HUF) vs. CIT [2017] 84 taxmann.com 53 (Guj) on identical facts.
The learned Departmental Representative (ld. DR for short) for the Revenue, on
the other hand, controverted the said facts and relied on the decision of the lower
authorities.
We have heard the rival submissions and perused the materials available on
record. It is observed that the assessee has shown LTCG of Rs.13,57,61,063/- from the
sale of immovable property and is said to have invested Rs.6,35,04,000/- in the capital
gain account and Rs.50 lacs in NHA bond for which the assessee is said to have claimed
deduction u/s. 54 and 54EC of the Act. It is also observed that the TDS has been
deducted in the hands of the individual Shri Anand Singhania along with his PAN
number. The ld. CIT(A) in his order has stated that the assessee has mentioned the wrong
PAN in the sale deed and has directed the assessee to follow the procedure prescribed u/s.
37BA(2) of the Act for the purpose of getting the TDS credit. The assessee has
challenged the action of the ld. CIT(A) in directing the assessee to follow the procedure
prescribed u/s. 37BA(2) of the Act for the purpose of getting TDS credit. The capital gain
on sale of two properties was offered to tax in the assessee’s return of income and the
assessee has thus claimed the credit of tax deducted in its return of income. The assessee
submits that no credit was claimed in Shri Anand Singhania’s individual return of income
4 ITA No. 28/Mum/2023 (A.Y.2018-19) M/s. Anant Singhania HUF vs. ITO
and to substantiate that TDS was not claimed twice, the assessee is said to have filed TDS
schedule ITR of Shri Anand Singhania to ensure that TDS of Rs.15 lacs was not claimed
in the individual capacity. It is also pertinent to point out that the A.O. has charged
capital gains in the hands of the assessee HUF but had refused to give TDS credit for the
same. It is observed that an affidavit of Shri Anand Singhania, HUF along with PAN
number was filed before the first appellate Tribunal to substantiate that TDS was not
claimed in Shri Anand Singhania’s return of income. We would like to place our reliance
on the decision of the Hon’ble Gujarat High Court in Bhavani Shah (HUF) (supra)
wherein it was held that under special circumstances TDS credit can be given to the
assessee HUF upon filing affidavit by the individual that the income does not belong to
him and that he has not claimed credit of TDS. It was further held that in genuine case
relief could be granted on this issue.
On the above facts of the case, it is evident that Shri Anand Singhania has not
claimed the TDS in the individual’s returns. The A.O. cannot deny the credit of TDS in
the assessee’s name when the corresponding capital gain on the said transaction was
taxed in the assessee HUF’s name and cannot take benefit of the mistake crept in, in the
sale deed. It is also pertinent to point out that the provision of section 199(3) mandates
that credit may be given to person other than those mentioned in sub-section (1) & (2),
which allows deviation in giving credit in suitable cases.
From the above observation, we are of the considered view that the assessee is
entitled to claim TDS for the impugned transaction and the A.O. is directed to allow the
5 ITA No. 28/Mum/2023 (A.Y.2018-19) M/s. Anant Singhania HUF vs. ITO
TDS credit in the hands of the assessee HUF after verifying that the same was not
claimed in the hands of the individual.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 07.06.2023
Sd/- Sd/-
(Prashant Maharishi) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : Roshani, Sr. PS
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai