New Astoria Restaurant, Hyderabad, Hyderabad V. ITO, Ward-4(2), Hyderabad, Hyderabad

ITA 1685/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6049 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 16-03-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 14-12-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: MD FAKHRUDDIN

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1685/HYD/2016 ASSESSMENT YEAR: 2013-14 M/S NEW ASTORIA RESTAURANT, HYDERABAD. PAN AABFN7443F VS. THE INCOME TAX OFFICER, WARD-4(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MD. FAKHRUDDIN REVENUE BY : SHRI K.J RAO DATE OF HEARING : 16-03-2017 DATE OF PRONOUNCEMENT : 22-03-2017 ORDER PER B. RAMAKOTAIAH, A.M: THIS IS IN APPEAL BY ASSESSEE FIRM AGAINST THE ORDER OF THE CIT(A)-1, HYDERABAD DATED 25-08-2016, DENYING THE CREDIT OF TDS OF RS. 59,189/- 2. BRIEFLY STATED, ASSESSEE IS A FIRM AND FILED ITS RETURN OF INCOME FOR THE A.Y 2013-14, DECLARING TOTAL INCOME AT 1,16,976/-, MAINLY COMPRISING PROPERTY INCOME AND CLAIMED TDS OF RS. 59,189/-. THE A.O WHILE ACCEPTING THE INCOME DECLARED HOWEVER, DID NOT GIVE CREDIT TO THE TDS AMOUNT ON THE REASON THAT THE SAME WAS NOT REFLECTED IN FORM 26AS. BEFORE THE LD. CIT(A) ASSESSEE CONTENDED THAT IT WAS A PARTNERSHIP FIRM AND ALL THE PARTNERS ARE HOLDING THE PROPERTY AND SINCE, THE TENANT BANK DEDUCTED TAX AND UPLOADED THE SAID AMOUNT IN THE NAME OF PARTNERS, THE TDS 2 ITA NO. 1685/HYD/2016 M/S. NEW ASTORIA RESTAURANT, HYDERABAD. COULD NOT GET REFLECTED AGAINST THE FIRM BUT WAS REFLECTED IN THE NAME OF INDIVIDUAL PARTNERS. SINCE, THE ENTIRE INCOME WAS SHOWN IN THE HANDS OF THE FIRM, THE TDS ALSO OUGHT TO HAVE BEEN GIVEN CREDIT IN THE HANDS OF THE FIRM. LD. CIT(A) HOWEVER, REJECTED THE CLAIM BY STATING AS UNDER: SUBMISSIONS OF THE APPELLANT AND THE ORDER PASSED BY THE ASSESSING OFFICER HAVE BEEN CAREFULLY CONSIDERED. ONLY ISSUE IS REGARDING CLAIM OF TDS AMOUNTING TO RS.59,189/- : THE ISSUE IS REGARDING CLAIM OF TDS AMOUNTING TO RS.59,189/- THE PROPERTY WAS POOLED BY THE PARTNERS INTO THE FIRM. HOWEVER, THE OWNERSHIP OF THE PROPERTY CONTINUES IN THE NAME OF PARTNERS. THE TENANT OF THE PROPERTY IS UNION BANK OF INDIA DEDUCTED TDS IN THE NAME OF THE PROPERTY OWNERS. AS PER FORM 26AS TDS IS IN FAVOUR OF THE PARTNERS. THE APPLICANT HAS CLAIMED THE TDS CREDIT IN THE NAME OF THE FIRM. THIS IS NOT ACCEPTABLE AS LEGALLY THE PROPERTY BELONGS TO INDIVIDUALLY TO PARTNERS. AND THE UNION BANK OF INDIA, TENANT HAS DEDUCTED THE TDS IN FAVOUR OF THE OWNERS. HAD THE PROPERTY BEEN TRANSFERRED ONLY THEN THE FIRM CAN CLAIM TDS IN ITS NAME. THE PARTNERSHIP DEED SUBMITTED BY THE APPLICANT DOES NOT REFER TO OWNERSHIP OF THE REFERRED PROPERTY. THE TDS CERTIFICATE CANNOT BE CHANGED IN FAVOUR OF SOME OTHER PERSON OR FIRM. THE APPLICANT'S CONTENTION IS NOT ACCEPTED. 3. LD. COUNSEL SUBMITTED THAT FIRM CANNOT OWN PROPERTY IN ITS NAME BUT PROPERTY IS BELONGING TO THE FIRM AS PARTNERS CONTRIBUTED/ POOLED AS AN ASSET OF THE FIRM. IT WAS SUBMITTED THAT SINCE THE INCOME WAS ASSESSED IN THE HANDS OF THE FIRM, THE CORRESPONDING TDS SHOULD HAVE BEEN GIVEN CREDIT AS PER SEC. 199 OF THE IT ACT, WHICH THE AO/ LD. CIT(A) DID NOT CONSIDER. LD. DR WHILE ADMITTING THE LEGAL POSITION, HOWEVER RELIED ON THE ORDER OF THE A.O/CIT(A). 3 ITA NO. 1685/HYD/2016 M/S. NEW ASTORIA RESTAURANT, HYDERABAD. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS. THE PROVISIONS OF SEC. 199 OF THE IT ACT ALLOW CREDIT IN THE HANDS OF THE PERSON WHO ADMITTED INCOME. THE SEC. 199 IS AS UNDER: 199. CREDIT FOR TAX DEDUCTED.- (1) ANY DEDUCTION MADE IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CHAPTER AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS A PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE, OR OF THE OWNER OF THE SECURITY, OR OF THE DEPOSITOR OR OF THE OWNER OF PROPERTY OR OF THE UNIT-HOLDER, OR OF THE SHAREHOLDER, AS THE CASE MAY BE. (2) ANY SUM REFERRED TO IN SUB-SECTION (1A) OF SECTION 192 AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS THE TAX PAID ON BEHALF OF THE PERSON IN RESPECT OF WHOSE INCOME SUCH PAYMENT OF TAX HAS BEEN MADE. (3) THE BOARD MAY, FOR THE PURPOSES OF GIVING CREDIT IN RESPECT OF TAX DEDUCTED OR TAX PAID IN TERMS OF THE PROVISIONS OF THIS CHAPTER, MAKE SUCH RULES AS MAY BE NECESSARY, INCLUDING THE RULES FOR THE PURPOSES OF GIVING CREDIT TO A PERSON OTHER THAN THOSE REFERRED TO IN SUB-SECTION (1) AND SUB-SECTION (2) AND ALSO THE ASSESSMENT YEAR FOR WHICH SUCH CREDIT MAY BE GIVEN. 4.1 THE BOARD HAS PRESCRIBED RULE 37BA. THE A.O AS WELL AS CIT(A) IGNORED THE PROVISIONS OF SEC. 199 OF THE IT ACT AND RULE THERE ON. NOT ONLY THAT THE REASON GIVEN BY THE CIT(A) IN REJECTING ASSESSEE CONTENTION IS ALSO NOT PROPER. THE BASIC ISSUE IS NOT WHETHER THE PROPERTY IS OWNED BY THE FIRM OR NOT, BUT WHETHER THE INCOME WAS DECLARED OR NOT. ADMITTEDLY, THE PROPERTY BELONGING TO INDIVIDUAL PERSONS HAS BEEN POOLED INTO THE FIRM AND ACCORDINGLY, IT BECAME AN ASSET OF THE PARTNERSHIP. FIRM CANNOT OWN PROPERTY IN ITS NAME. GENERALLY THEY ARE IN THE NAME OF MANAGING PARTNERS OR IN THE NAME OF INDIVIDUAL PARTNERS. SINCE THE 4 ITA NO. 1685/HYD/2016 M/S. NEW ASTORIA RESTAURANT, HYDERABAD. A.O ACCEPTED THE INCOME IN THE HANDS OF THE FIRM, AS PER THE PROVISIONS OF SEC. 199 OF THE IT ACT THE CREDIT OF TAX DEDUCTED HAS TO BE GIVEN IN THE HANDS OF THE FIRM. IN CASE THE AMOUNT IS NOT REFLECTED IN FORM 26AS, THE SAME SHOULD NOT BE PREVENT ASSESSEE CLAIMING THE DEDUCTION AS PER PROVISIONS OF SEC. 199 OF THE IT ACT AND RULE 37BA WHICH CLEARLY PROVIDES THE METHODOLOGY FOR GIVING CREDIT. THE A.O IS DIRECTED TO ALLOW THE CREDIT IN THE HANDS OF THE FIRM, AFTER DUE VERIFICATION. ASSESSEES GROUNDS ARE ALLOWED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2017. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED: 22 ND MARCH, 2017 KRK 1) M/S NEW ASTORIA RESTAURANT, C/O M/S. M.A. MOHIADDIN & CO, CAS, 307, LENAINE ESTATE, 5-9-189, ABID ROAD, HYD 01. 2) THE ITO, WARD-4(2), HYDERABAD. 3) CIT(A) -1, HYDERABAD 4) PCIT -1, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE