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Facts
The assessee, Kailash Rani Shridhar, appealed against the CIT(A)'s order enhancing income and not allowing TDS credit. The assessee had transferred her proprietorship firm to Bansi Lal Shridhar, but some business associates continued to deduct TDS under the assessee's old PAN. The assessee requested this TDS credit to be adjusted against the new proprietor's PAN, which the AO failed to consider.
Held
The Tribunal restored the issue of TDS credit to the Assessing Officer for fresh consideration. It directed the AO to allow the benefit of TDS credit reflected in Form 26AS to the legitimate beneficiary (the new proprietor) in whose account the relevant transaction amount is credited. The impugned order of the CIT(A) was set aside.
Key Issues
Whether the benefit of TDS credit, deducted under the old PAN of the original proprietor after business transfer, should be allowed to the new proprietor under the new PAN.
Sections Cited
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI
(A.Y.2017-18) Kailash Rani Shridhar, R/o H No. 715, Sector 15A, Faridabad, Haryana 121001 ...... अपीलाथ�/Appellant PAN: ADZPS-2752-H बनाम Vs. Income Tax Officer, Ward 1(4), Faridabad, New CGO Complex, NH 4, NIT Faridabad, ..... �ितवादी/Respondent Haryana 121001 अपीलाथ� �ारा/ Appellant by : S/Shri A.S Nagpal & Kunal Nagpal, Advocates �ितवादी�ारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई क� ितिथ/ Date of hearing : 10/12/2024 घोषणा क� ितिथ/ Date of pronouncement : : 10/12/2024 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)/Additional Joint Commissioner of Income Tax-(Appeals), Aurangabad (hereinafter referred to as 'the CIT(A)') dated 20.03.2024, for assessment year 2017-18.
The assessee in appeal has raised six grounds assailing the action of CIT(A) enhancing the income from house property from Rs.14,89,822/- to Rs.15,84,322/- and enhancing the income from other sources from Rs.5,78,144/- to Rs.8,36,483/-.
(AY 2017-18) The assessee has further assailed the order of CIT(A) and Assessing Officer (AO) in not allowing credit of TDS as per Form no. 26AS.
Shri A.S Nagpal, appearing on behalf of the assessee narrating facts of the case submitted that the assessee was running a proprietorship firm under the name M/s Kalkaji Tools. Since, the assessee was not able to manage the business, the assessee transferred ownership of proprietorship firm to Bansi Lal Shridhar w.e.f. 01.04.2016. The assessee immediately, thereafter, informed the Department regarding change of ownership vide communication dated 07.04.2016 (at page 8 of the paperbook). The assessee also got necessary amendments done in VAT documentation w.e.f 01.04.2016. Revised registration certificate under VAT in the name of M/s. Kalkaji Tools was issued by the authorities, the same is at page 14 and 15 of the paper book. The assessee had informed regarding sale of business/change in ownership of proprietorship firm to all its business partners. However, some of the business associates of the assessee deducted TDS in the old PAN. The same has not been claimed by the assessee till date. The assessee made a request to the Department to adjust TDS against new PAN w.e.f 01.04.2016 ,as the assessee had sold its business and had also informed to the Department. However, the AO failed to consider submissions of the assessee and made addition. The assessee further prayed for allowing/adjusting TDS credit as per Form 26AS against PAN of new proprietor of the firm.
Per contra, Shri Rajesh Tiwari representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.
Both sides heard, orders of the authorities below examined. The solitary issue in appeal is against not allowing the benefit of TDS credited available in PAN (AY 2017-18) of assessee to the new proprietor of firm M/s. Kalkaji Tools. The contention of the assessee is that the assessee had sold the proprietorship firm to Bansi Lal Shridhar vide agreement to sell dated 01.04.2016. The assessee had intimated to the Department regarding fact of closure of business by the assessee and transfer of the same to her husband Shri Bansi Lal Shridhar vide communication dated 07.04.0216. Since, some of the parties had deducted TDS on the PAN of assessee and the assessee has not claimed said TDS as it pertains to proprietorship firm M/s. Kalkaji Tool and the legitimate beneficiary of TDS is new proprietor Bansi Lal Shridhar, hence, credit of said TDS s be allowed to the new proprietor under new PAN.
Taking into consideration entire facts of the case, I deem it appropriate to restore this issue back to the file of AO for fresh consideration and allow the benefit of TDS credit reflected in Form 26AS to the right full assessee in whose account the relevant transaction amount is credited.