AJIT DAYAL LALVANI,MUMBAI V. INCOME TAX OFFICER, MUMBAI

ITA 4349/MUM/2025

AI Insights

The case involves appeals by Mr. Ajit Dayal Lalvani against the orders of the Additional Commissioner of Income Tax (Appeals)-4, Bengaluru, for the assessment years 2023-24 and 2024-25. The primary issue was the non-grant of TDS credit on dividend income from shares held jointly with his siblings in J. B. Advani and Company Private Limited. The Centralized Processing Centre did not grant the TDS credit as it was not reflected in Form 26AS under the assessee's name. The First Appellate Authority upheld this decision but required verification of the deductor's statement and the TDS credit's reflection in the assessee's PAN. The Tribunal, referencing Rule 37BA(2) of the Income Tax Act, directed the Assessing Officer to verify the assessee's claim and allow the TDS credit if the conditions were met.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772329 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: MANISH RANKA
• Keywords: TDS; Share purchase agreement; FORM 26AS

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VP AND SHRI GIRISH AGRAWAL, AM ITA Nos.4349 & 4350/Mum/2025 (Assessment Years: 2023-24 & 2024-25) Mr. Ajit Dayal Lalvani 3 Gazdar House, 45 Bhulabhai Desai Road, Mumbai-400 026 Vs. Income Tax Officer (Ward 8(2)(1)) Aaykar Bhavan, M. K. Road, Mumbai-400 020 PAN/GIR No. ABBPL 4560 C (Appellant) : (Respondent) Appellant by : Shri Manish Ranka Respondent by : Shri Surendra Mohan Date of Hearing : 14.08.2025 Date of Pronouncement : 25.08.2025 O R D E R Per Saktijit Dey, VP: The captioned appeals by the assessee, arise out of two separate orders passed by Additional Commissioner of Income Tax (Appeals)-4, Bengaluru (‘Addl. CIT(A) for short), pertaining to the assessment years (A.Y.) 2023-24 and 2024-25. 2. The only common issue arising in both the appeals relates to non-grant of TDS credit claimed in the return of income. 3. Briefly the facts are, in the return of income filed for the impugned assessment year, the assessee offered to tax the dividend income arising out of shares jointly held with his brother - Mr. Deep Lalvani and sister - Ms. Reshma Lalvani, in a company named J. B. Advani and Company Private Limited. The credit for corresponding TDS deducted on the dividend was claimed in the return of income. However, while processing the return of Printed from counselvise.com 2 ITA Nos.4349 & 4350/Mum/2025 (A.Ys.2023-24 & 2024-25) Mr. Ajit Dayal Lalvani vs. ITO income, the Centralized Processing Centre (‘CPC’ for short) did not grant credit for TDS as such TDS was not reflected in Form 26AS. 4. Being aggrieved with non-grant of TDS, the assessee preferred an appeal before learned First Appellate Authority. 5. However, while deciding the appeal, learned First Appellate Authority did not allow credit for TDS, but directed the A.O. to allow the TDS credit only after ensuring that the deductor had filed the correct statement and the TDS credit gets reflected in the PAN of the assessee. 6. We have heard the parties and perused the materials available on record. Undisputedly, the assessee along with his siblings had purchased shares in a company in the name and style of J. B. Advani and Company Private Limited. In the share certificate, assessee’s brother - Mr. Deep Lalvani is mentioned as the first holder. Whereas, the assessee and his sister - Ms. Reshma Lalvani have been mentioned as the second and third holders. However, there is no dispute that shares were held jointly. While remitting dividend, the company had issued the dividend warrant in the name of the first holder, i.e., Mr. Deep Lalvani and tax has been deducted on remittance of the dividend. However, in Form 26AS, the entire TDS is reflected in the name of the first holder, i.e., Mr. Deep Lalvani. It is a fact on record that all the three share holders have declared their respective shares in the dividend income in the return of income filed by them individually and claimed credit of the corresponding TDS. However, in case of the assessee and his sister, the TDS credit has been denied on the ground that in Form No. 26AS, no such TDS credit is available in their name. Printed from counselvise.com 3 ITA Nos.4349 & 4350/Mum/2025 (A.Ys.2023-24 & 2024-25) Mr. Ajit Dayal Lalvani vs. ITO 7. On a perusal of the impugned order of learned First Appellate Authority, it is very much clear that not only the first holder - Mr. Deep Lalvani had furnished a declaration that he has offered his share of dividend income and claimed only corresponding TDS and not the entire TDS. However, despite that assessee’s claim of TDS has not been granted. On a reference being made to sub rule (2) to Rule 37BA, it becomes clear that in respect of income on which tax is deducted at source if is assessable in the hands of a person other than the deductee, credit for corresponding TDS has to be granted to that person and not to the deductee. 8. Ld. Counsel appearing for the assessee has submitted before us that in case of the third shareholder, assessee’s sister - Ms. Reshma Lalvani, while deciding the appeal involving identical issue, learned First Appellate Authority has allowed the corresponding TDS credit in terms with Rule 37BA(2) of the Act. A copy of the said order dated 06.12.2024 has been placed on record. 9. Thus, keeping in view the facts discussed above, we direct the A.O. to allow corresponding TDS credit after factually verifying assessee’s claim that the corresponding dividend income has been offered to tax in the respective assessment years and also the fact that part of TDS has not been claimed by the other deductees. 10. In the result, the appeals are allowed for statistical purpose. Order pronounced in the open court on 25.08.2025 Sd/- Sd/- (Girish Agrawal) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 25.08.2025 Roshani, Sr. PS Printed from counselvise.com 4 ITA Nos.4349 & 4350/Mum/2025 (A.Ys.2023-24 & 2024-25) Mr. Ajit Dayal Lalvani vs. ITO Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "