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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI BEFORE SHRI G.D. AGRAWALG.D. AGRAWALG.D. AGRAWAL & G.D. AGRAWAL & AND & SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARGSHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG
PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP This appeal by the assessee for the assessment year 2008-09 is directed against the order of learned CIT(A)-XXVI, New Delhi dated 29th April, 2013.
Ground No.1 of the assessee’s appeal reads as under:-
“The Ld CIT(A) erred in law and on the facts of this case by restricting the credit of TDS to the appellant only of Rs.2,51,810/- (1/3rd of total TDS of Rs.7,55,432/- on rent) as against the TDS of Rs.7,55,432/- claimed by the appellant on the rental income from the property 2, Kautilya Marg, Chanakya Puri, New Delhi for the AY 2008-09.”
2 ITA-4107/Del/2013
The other grounds are only arguments in support of above ground of appeal.
We have heard the arguments of both the sides and have perused the material placed before us. We find this issue to be covered in favour of the assessee by the decision of ITAT Delhi Bench ‘G’ in the case of Sunita Devi Vs. ACIT vide order dated 21st August, 2015. In the above case also, the assessee had claimed the credit for entire TDS though part of the income was diverted to some other person. The Revenue has allowed only the proportionate credit to the extent of income assessed in the hands of the assessee. The ITAT directed to allow the entire credit of TDS subject to verification that no credit for TDS had been claimed and allowed in the hands of the person to whom the income has been diverted. The relevant finding of the ITAT which is in paragraph 12 of the order reads as under:-
“12. Further, the decisions of the Tribunal in cases of Renovation Technologies (supra) and Supreme Renewable Energy Ltd. (supra) also support the stand of the assessee. Further, the fact that the department has neither given credit for the tax of Rs.12,23,608 to the assessee or to Shri Kapil Ahluwalia nor refunded the said sum to the deductor. The constitution has not mandated the department to swallow the rightful money of the tax payer without any rule of law. Further, the departmental representative submitted that there is possibility that Shri Kapil Ahluwalia might have taken credit of the balance Rs.12,23,608/- and therefore if credit of this amount is allowed to the assessee, it will amount to allowing of double credit of the same account and it will be unjust enrichment in the hands of assessee. The ld. AR however, countered the argument of the DR and stated that the TDS Certificate has been issued to the assessee only and as per data base of Income-tax department, the TDS is reflecting against the assessee only, therefore allowing credit in the hands of Shri kapil Ahluwalia was not possible. He further submitted
3 ITA-4107/Del/2013 that Sh. Kapil Ahluwalia is liable to pay tax on the income transferred to him, and therefore, not allowing credit of Rs.12,23,608/- to the assessee and retaining the amount by the Income-tax department without giving adjustment to either assessee or Sh. Kapil Ahluwalia amounts to unjust enrichment in the hands of the department. We agree with the above contention of the ld. Authorized Representative. We are of the view that neither party should be made unjust enriched at the cost of the other. We hold that the credit of the Rs.12,23,608/- is allowable in the hands of the assessee, in view of the clear provisions of sub section (1) of section 199 of the Act and Rules made thereunder. However, we direct the Assessing Officer to verify whether any credit of the TDS of Rs.12,23,608/- has been allowed by the Income-tax Department in the hands of Shri Kapil Ahluwalia or not. If it has been not allowed, then the credit of this amount should be given in the hands of the assessee. Accordingly ground No.1 of the assessee is allowed.”
Respectfully following the above decision of ITAT, we hold that the entire credit for the TDS made be allowed in the hands of the assessee subject to verification that no credit for the TDS is claimed by the co-owners of the property. We direct the Assessing Officer to verify whether any credit for TDS has been made by co-owners to whom 1/3rd of the rental income is transferred and, if no credit for TDS is claimed by them, then the entire credit for TDS be allowed in the hands of the assessee.
In the result, the appeal of the assessee is deemed to be allowed as above. Decision pronounced in the open Court on 27.06.2016.