Mr.Vivek Shankar , Bangalore V. Deputy Commissioner of Income Tax CPC , Bangalore

ITA 2901/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9355 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-06-2019
• Assessment Year: 2017-2018
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R N SIDDP PAJI
• Assessee Lawyers: J V KODHANDAPANI
• Keywords: TDS; Set aside
• Section: 12; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH ES : B , BANGALORE BEFORE SHRI B.R. B ASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICAL MEMBER ITA NO. 2 901(BANG)/ 201 8 ( ASSESSMENT YEAR : 2017 - 18 ) SHRI VIVEK SHANKAR, NO.119, 28 TH CR OS S, 12 TH M AIN, BSK II ST A GE, BANGALORE - 560 070 PAN NO.A TOPS1388Q APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME TAX, CPC, BANGALORE RESPONDENT AND ITA NO.2 902(BANG) /20 18 (ASSESSMENT YEAR : 2017 - 18) SHRI VIKRAM SHANKAR, NO.119, 28 TH CROSS, 12 TH MAIN, BSK II STAGE, BANGALORE - 560 070 PAN NO. EDHPS30621 APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME TAX, CPC, BANGALORE RESPONDENT APPELLANT BY : SH RI J.V.KODHANDAPANI, CA RE VENUE BY : SHRI R.N.SIDDP PAJI, ADDL.CIT DATE OF HEARING : 1 7 - 0 6 - 2019 DATE OF PRONOUNCEMENT : 28 - 06 - 2019 O R D E R PER B.R.BAS K ARAN, ACCOUNANT MEMBER BOTH THESE APPEALS F ILED BY THE RESPECTIVE ASSESSEE S ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LEARNED (CIT(A) - 12, BANGALORE AND THEY RELATE TO ASSESSMENT YEAR 20 17 - 18. SINCE THE ISSUES CONTESTED IN 2 THIS APPEAL ARE IDENTICAL IN NATURE , THEY WE RE HEARD TOGETHER AND ARE BEING D I SPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E . 2. TH E FACTS REL A TIN G TO THE CASE ARE STATED IN BRIEF. BOTH THE ASSESSEES ARE BROTH E RS . T HEY , ALONG WITH THEIR MOTHER , WERE CO - OWNERS OF AN IMMOVABLE PROPERTY. ALL THE THREE PERSONS S O LD THE SAME DURING TH E Y E AR UNDER CONSIDERATION FOR A S U M OF RS. 9.00 C R ORES. THE SHARE OF EACH OF THE PER S ONS WAS R S.3.00 CRORES. THE BUYER OF THE PROPERTY DEDUCTED TAX AT SOURCE U/S 194I A OF THE IT ACT, 1961 FROM THE SALE CONSIDERATION . HOWEVER, THE BUYER REMITTED THE ENT I RE TDS AMOUNT IN THE NAME OF MOTHER OF ASSESSEE S HEREIN, BEING ONE OF THE CO - OWNERS. IN VIEW OF THE ABOVE, THE SHARE OF TDS AMOUNT OF THE ASSESSEES HEREIN WAS NOT REFLECTED IN THE FORM NO.26AS. 3. IN T HE RETURN OF INCOME FILED BY THE ASES S SEES HEREIN, THEY CLAIMED THEIR SHARE OF TDS AT RS.3.00 LAKHS EACH. SINCE IT WAS NO T REFLECTED IN THEIR FORM 26AS, WHILE PROCESSING THE RETURN OF INCOME U/S 143(1), THE SAID AMOUNT WAS NOT GIVEN CREDIT . 4. BOTH T HE ASSE S SEES C A RRIED THE M ATTER IN APPEAL FILED BY THEM BEFORE THE LD . CIT(A) . B Y PL A CING RELIANCE ON RULE 37BA OF I T RULES , BOTH THE AS S ESSE E S CLAIMED THAT THEIR SHARE OF TDS SHOULD BE ALLOWED CREDIT IN THEIR RESPECTIVE HANDS . THEY ALSO TOOK SUPPORT OF SEC.199 OF THE IT ACT, 1961 , SINCE THEY HAVE OFFERED THE IR SHARE OF INCOME FROM LONG TERM CAPITAL GAINS. THE LD. CIT(A) HOWEVER, TOOK T HE VIEW THAT THE CREDIT FOR THEIR SHARE OF TDS CAN BE GIVEN ONLY IF THE TDS STATEMENTS ARE RECTIFIED. ACCORDINGLY, THE LD. CIT(A) REJECTED THE APPEAL S OF THE SE ASSESSEES. AGGRIEVED, BOTH THE ASSESSEE S ARE IN APPEAL BEFORE US. 3 5. THE LD. AR SUBMITTED THAT THE CAPITAL GAINS ARISING ON SALE OF IMMOVABLE PROPERTY HAS BEEN OFFERED BY BOTH THE ASSESSEES AND THEIR MOTHER EQUALLY I.E 1/3 RD EACH. HE SUBMITTED THAT T HE BUYER HAS COMMITTED AN ERROR IN REMITTING THE ENTIRE AMOUNT OF TDS IN THE NAME OF MOTHER OF THE A SSESSEES HEREIN. HE SUBMITTED THAT THE MOTHER OF THE ASSESSEES HAS CLAIMED CRED IT FOR HER SHARE OF TDS ONLY I.E.RS.3.00 LAKHS ONLY. ACCORDINGLY HE SUBMITTED THAT THE REMAINING AMOUNT OF RS.6.00 LAKHS BELONG TO THE ASSESSEES HEREIN AND THE SAME HAS NOT BEEN GIVEN CREDIT IN ANYBODYS HAND. ACCORDINGLY HE SUBMITTED, CONSIDERING PECULIAR FACTS OF THE CASE, BOTH THE SE ASSESSEES SHARE OF TDS AGGREGATING TO RS.6.00 LAKHS SHOULD BE ALLOWED CREDIT IN THEIR RESPECTIVE HANDS @ RS.3.00 LAKHS EACH, EVEN THOUGH TH E IR FORM 26AS DOES NOT REFLECT THE TDS AMOUNT. THE LD. AR ALSO SUBMITTED THAT THE CLAIM S OF ASSE S SEES ARE SUPPORTED BY RULE 37BA OF THE IT ACT, 1961. 6. T HE LD. DR SUBMITTED THAT THE PROVISIONS OF RULE 37BA PRESCRIBE A PROCEDURE FOR CLAIMING CREDIT OF TDS. HOWEVER, THE ASSESSEES HEREIN HAVE NOT FOLLOWED THE SAME. HENCE THE LD CIT(A) HAS EXPRESSED THE VIEW THAT THE TDS STATEMENTS SHOULD BE CORRECTED FIRST AND THEN O NLY CREDIT CAN BE GIVEN IN THE HANDS OF THE ASSESSEES. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THERE IS NO DISPUTE THAT THE PROPE RTY WAS OWNED BY THREE PE RSONS NAMELY, BOTH THE ASSESSEE S HEREIN AND THEIR MOTHER. THE LONG TERM CAPITAL G AINS ARISING ON S A LE OF PROPERTY HA VE B E EN OFFERED BY EACH OF THE ABOV E SAID THREE PERSONS EQUALLY. NORMALLY, THE TDS SH OULD HAVE BEEN DEDUCTED AND REM ITTED BY THE BUYER ON PROPERTY EQUALLY IN THE NAME OF THE ABOVE SAID 4 THREE PERSONS , IN WHICH CASE, THE SAME WOULD HAVE BEEN REFLECTED IN FORM 26AS . HOWEVER, IT IS STATED THAT THE BUYER HAS REMITTED THE ENTIRE TDS AMOUNT IN THE NAME OF THE MOTHER OF THE ASSESSEES HEREIN. 8. THE PROVISIONS OF SEC.199 STATES THAT THE TDS AMOUNT SHALL BE TREATED AS A PAYME NT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE. ADMITTEDLY, THE TDS AMOUNT OF RS.9.00 LAKHS WAS DEDUCTED BY THE BUYER OF PROPERTY FROM THE INCOME OF ALL THE THREE CO - OWNERS AND HENCE, IN TERMS OF SEC.199 OF THE ACT, EACH OF THE CO - OWNER SHALL BE ENTITLED FOR TDS CREDIT OF RS.3.00 LAKHS EACH. HOWEVER, IT IS STATED THAT THE BUYER , THOUGH DEDUCTED THE TDS FROM THE INCO ME OF ALL THE THREE PERSONS, HAS REMITTED THE SAME IN THE NAME OF ONE OF THE CO - OWNERS ONLY, I.E., THE MOTHER OF T HE ASSESSEES HEREIN. 9. WE NOTICE THAT THE PROVISIONS OF RULE 37BA PRESCRIBE A METHODOLOGY FOR CLAIMING CREDIT FO R TDS IN THIS KIND OF SITUATION. AS PER RULE 37BA(2)(I), WHEN THE WHOLE OR PART OF THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE IS ASSESSABLE IN THE HANDS OF A PERSON OTHER THAN THE DEDUCTEE, CREDIT FOR THE WHOLE OR ANY PART OF THE TAX DEDUCTED AT SOURCE, AS THE CASE MAY BE, SHALL BE GIVEN TO THE OTHER PERSON AND NOT TO THE DEDUCTEE. ADMITTEDLY, IN THE PRESENT CASES, THE TDS CREDIT OF RS.3.00 LAKHS EACH SHOULD BE GIVEN TO THE ASSESSEES HEREIN, SINCE PROPORTIONATE PART OF THE INCOME ON WHICH TAX HAS BEEN DEDUCTED WAS ASSESSED IN THE HANDS OF THE ASSESSEES HEREIN. 10. WE NOTICE THA T THE PROVISO TO RULE 37BA(2) AND CLAUSES (II) AND (III) THEREOF PRESCRIBE A PROCEDURE FOR CLAIMING CREDIT. THE DIFFICULTY OF THE ASSESSEES HEREIN IS THAT THEY DO NOT HAVE ANY CONTROL OVER THE BUYERS OF 5 THE PROPERTY AND WITHOUT CO - OPERATION OF THE BUYER OF THE PROPERTY, THE PROCEDURE PRESCRIBED IN RULE 37BA(2) CANNOT BE FULFILLED. WE HAVE ALREADY NOTICED THAT THE BUYER OF THE PROPERTY HAS COMMITTED AN ERROR IN REMITTING ENTIRE AMOUNT OF TDS IN THE NAME OF THE MOTHER OF THE ASSESSEES HEREIN. 11. THE AS SESSEES HEREIN HAVE SUBMITTED THAT THEIR MOTHER HAS CLAIMED CREDIT FOR RS.3.00 LAKHS ONLY, WHILE HER FORM 26AS SHOULD BE SHOWING TDS AMOUNT OF RS.9.00 LAKHS. THIS FACT ALSO REQUIRES VERIFICATION. 12. ACCORDINGLY WE ARE OF THE VIEW THAT THIS PECULIAR P ROBLEM CAN BE RESOLVED AT THE END OF THE REVENUE ONLY. WHEN ASKED AS TO WHO CAN RESOLVE THIS PROBLEM, THE LD D.R SUBMITTED THAT THE TDS OFFICER OF THE ASSESSEES HEREIN MAY BE ENTRUSTED WITH THE JOB. ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY LD CIT( A) IN THE HANDS OF BOTH THE ASSESSEES HEREIN AND RESTORE THE MATTER OF RESOLVING THE MATTER OF GRANTING DUE TDS CREDIT TO THE FILE OF THE TDS OFFICER WITH THE FOLLOWING DIRECTIONS: - ( A ) HE SHALL VERIFY THE RECORDS OF MOTHER OF THE ASSESSEES HEREIN AND EN SURE THAT SHE HAS BEEN GIVEN CREDIT FOR HER SHARE OF RS.3.00 LAKHS ONLY. HE ALSO SHOULD ENSURE THAT THE TDS AMOUNT REMITTED BY THE BUYER OF PROPERTY WAS RS.9.00 LAKHS. ( B ) AFTER SATISFYING HIMSELF THAT THE BALANCE AMOUNT OF TDS OF RS.6.00 LAKHS IS PENDING TO BE GIVEN CREDIT, HE MAY GIVE CREDIT @ RS.3.00 LAKHS EACH TO THE CREDIT OF ASSESSEES HEREIN , HE IS PERMITTED TO DO SO . 6 ( C ) IF HE FINDS THAT HE CANNOT DO SO AND FINDS THAT THE PROCEDURE PRESCRIBED IN RULE 37BA(2) IS MANDATORILY TO BE FOLLOWED, THEN HE MAY ISS UE SUMMONS TO THE BUYERS OF THE PROPERTY AND ENFORCE THEM TO COMPLETE THE PROCEDURES PRESCRIBED IN RULE 37 BA(2) OF I.T RULES AND THE SAME WOULD RESULT IN GIVING CREDIT OF TDS AMOUNT TO THE ASSESSEES HEREIN. WE ORDER ACCORDINGLY. 13. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ON 28 - 06 - 2019 SD/ - SD/ - ( PAVAN KUMAR GADALE , ) ( B.R.BA S KARA N ) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: THE28TH JUNE, 2019. * AM C OPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6. ITO (TDS) 7 .GUARD FILE BY ORDER ASST. REGISTRAR