Shri Naresh Kumar Bansal, Lucknow V. Income Tax Officer-2(2), Lucknow

ITA 568/LKW/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1508 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ON FACTS
• Keywords: TDS; Set aside
• Section: 6

Judgement Text

I.T.A. NO.568/LKW/2018 ASSESSMENT YEAR:2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.568/LKW/2018 ASSESSMENT YEAR:2014-15 SHRI NARESH KUMAR BANSAL, BANSAL HOUSE, 20, WAY ROAD, LUCKNOW. PAN:AAMPB 1806 F VS. INCOME TAX OFFICER-2(2), LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A)-1, LUCKNOW DATED 24/05/2018. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE DISALLOWANCE E OF THE TDS CLAIMED BY THE APPELLANT, THE INCOME OF WHICH HAS ALREADY BEEN SUBJECTED TO TAX I N THE HANDS OF THE COPARCENERS OF THE PROPERTY. 2. THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN HOLD ING THAT SHOWING OF RENTAL INCOME IN THE ITRS OF THE COPARCE NERS DOES NOT SUFFICE THE TDS CLAIM MADE BY THE APPELLAN T AND FURTHER PROCEEDING TO DISALLOW THE CLAIM OF RS.39,5 877/-. 3. THAT THE LEARNED CIT(A) HAS NOT CORRECTLY APPREC IATED THE FACTS AND CIRCUMSTANCES OF THE CASE IN AS MUCH AS W HEN THE AGREEMENT TO LEASE OUT THE PROPERTY WAS ENTERED , THE APPELLANT BY SHRI J. J. MEHROTRA, F.C.A. RESPONDENT BY S HRI C. K. SINGH, D. R. DATE OF HEARING 06/03/2019 DATE OF PRONOUNCEMENT 15 / 03 /201 9 I.T.A. NO.568/LKW/2018 ASSESSMENT YEAR:2014-15 2 COPARCENERS WERE MINOR AND THEIR INCOME WAS INCLUDE D IN THE HANDS OF THE RESPECTIVE PARENTS UNDER SECTION 6 4 OF THE I.T. ACT, 1961, AND ON THEIR ATTAINING MAJORITY , THE PROPERTY INCOME HAS BEEN SEPARATELY SHOWN AND SUBJECTED TO TAX IN THE HANDS OF THE RESPECTIVE COPARCENERS WHO HAD FILED THEIR RETURNS AND NOT CLA IMED CREDIT OF TDS AND, THEREFORE, THERE IS NO JUSTIFICA TION IN DENYING THE TDS CLAIMED IN THE HANDS OF THE APPELLA NT WHO AS REPRESENTATIVE OF ALL COPARCENERS HAD ENTERE D INTO THE AGREEMENT ON BEHALF OF THE MINOR COPARCENERS AT THE TIME OF LETTING OUT THE PROPERTY. 2. AT THE OUTSET, LEARNED A. R. INVITED OUR ATTENTI ON TO THE FACT THAT THE ASSESSEE HAD RECEIVED RENT FROM A BUILDING LET OUT TO INCOME TAX DEPARTMENT ON BEHALF OF OTHER PERSONS WHO WERE MINO RS WHEN THE BUILDING WAS CONSTRUCTED AND IN THIS RESPECT OUR ATTENTION W AS INVITED TO THE AGREEMENT WHICH WAS EXECUTED IN THE YEAR 1987 AND A COPY OF WHICH WAS PLACED ON PAPER BOOK PAGE 14 ONWARDS. LEARNED A. R. SUBMITTED THAT ASSESSEE HAS BEEN TRANSFERRING THE RENT EQUALLY TO FOUR CHILDREN AND DURING THIS YEAR ALSO THE ASSESSEE DID THE SAME AND IN THI S RESPECT OUR ATTENTION WAS INVITED TO COPY OF COMPUTATION OF INCOME OF SHI VAM BANSAL, KARTIK BANSAL AND ANUSHREE BANSAL PLACED AT PAGES 23 TO 29 OF THE PAPER BOOK. OUR SPECIFIC ATTENTION WAS INVITED TO THE COMPUTATI ON OF INCOME WHEREIN THE SHARE OF RENT BELONGING TO THE CHILDREN WERE DECLAR ED IN THE RESPECTIVE RETURNS OF INCOME. LEARNED A. R. SUBMITTED THAT SI NCE THE RENT WAS BEING RECEIVED BY THE ASSESSEE ON BEHALF OF CHILDREN, THE DEDUCTOR DEDUCTED THE TAX AT SOURCE AND DEPOSITED THE SAME WITH THE GOVER NMENT AND THE BENEFIT OF WHICH WAS NOT ALLOWED TO THE ASSESSEE FOR THE RE ASON THAT ASSESSEE HAD NOT DISCLOSED THE RENT IN HIS RETURN OF INCOME. LE ARNED A. R. SUBMITTED THAT ASSESSEE HAD DULY TRANSFERRED THE PROPORTIONATE REN T TO THE RESPECTIVE CHILDREN AND THEY HAD DECLARED THE SAME IN THEIR RE TURN OF INCOME THEREFORE, THERE WAS NO JUSTIFICATION FOR NOT ALLOWING CREDIT TO THE ASSESSEE. RELIANCE IN THIS RESPECT WAS PLACED ON THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN I.T.A. NO.568/LKW/2018 ASSESSMENT YEAR:2014-15 3 THE CASE OF CIT VS. GANESH NARAIN BRIJ LAL LTD. 244 TAXMAN 14 (CAL.) AND IN THE CASE OF CIT VS. BHOORATNAM & CO. 92 DTR (AP) 38 2. 3. LEARNED D. R., ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF AUTHORITIES BELOW. 4. I HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THR OUGH THE MATERIAL PLACED ON RECORD. I FIND THAT THE ASSESSING OFFICE R DID NOT ALLOW CLAIM OF TDS AMOUNTING TO RS.39,587/- WHICH WAS DEDUCTED FRO M THE RENTAL INCOME AND WHICH ASSESSEE HAD RECEIVED ON ACCOUNT OF RENT FROM HOUSE PROPERTY WHICH BELONGED TO OTHER PERSONS. THE ASSESSING OFF ICER DID NOT ALLOW THE CREDIT AS THE RENTAL INCOME WAS NOT DECLARED BY THE ASSESSEE. I FIND THAT THE PROPERTY WAS GOT CONSTRUCTED BY ASSESSEE ON BEH ALF OF MINOR CHILDREN VIZ. SHIVANI BANSAL, KARTIK BANSAL, ANUSHRI BANSAL AND SANKALP BANSAL, WHICH IS APPARENT FROM THE CONSTRUCTION AGREEMENT FOR CON STRUCTION OF THE SAID PROPERTY WHICH WAS FILED BY THE ASSESSEE ON 06/03/2 019. THE SAID PROPERTY WAS LEASED OUT BY THE ASSESSEE TO INCOME TAX DEPART MENT, A COPY OF SUCH AGREEMENT IS PLACED AT PAGES 7 TO 11 OF THE PAPER B OOK. THE COPY OF COMPUTATION SHEETS OF INCOMES OF THE ANUSHREE BANSA L, KARTIK BANSAL AND SHIVAM BANSAL, PLACED AT PAGE 23 ONWARDS, DEMONSTRA TE THAT THEY HAD DECLARED 1/4 TH SHARE EACH IN THE RENT RECEIVED BY THE ASSESSEE ON THEIR BEHALF AND THEY HAVE NOT CLAIMED TDS IN THEIR RETUR NS OF INCOME. TDS DEDUCTED WAS REFLECTED IN THE ACCOUNT OF THE ASSESS EE. THE ASSESSEE HAS BEEN WRITING TO INCOME TAX DEPARTMENT TO REVISE THE LEASE AGREEMENT WITH THE CHILDREN WHO HAD ATTAINED MATURITY BUT INCOME T AX DEPARTMENT HAD NOT ACTED UPON. I FURTHER FIND THAT THERE IS NO JUSTIF ICATION IN NOT ALLOWING TDS TO THE ASSESSEE AS THE RENT NEVER BELONGED TO THE A SSESSEE AND IT WAS TRANSFERRED TO THE CHILDREN PROPORTIONATELY TO WHOM THE RENTAL INCOME BELONGED AND THEY HAD DECLARED THE RENT IN THEIR RE SPECTIVE INCOME TAX RETURNS. THEREFORE, I SET ASIDE THIS ISSUE TO THE OFFICE OF THE ASSESSING I.T.A. NO.568/LKW/2018 ASSESSMENT YEAR:2014-15 4 OFFICER WHO SHOULD VERIFY THE RETURNS FILED BY THE CHILDREN TO DETERMINE AS TO WHETHER THEY HAD DISCLOSED THE INCOME FROM RENT OF THE SAME PROPERTY IN THEIR RETURNS AND HAD NOT CLAIMED TDS ON SUCH PROPE RTY AND AFTER DETERMINING SHOULD ALLOW THE ASSESSEE THE REFUND OF TDS IF HE FINDS THAT SAME RENT RECEIVED FROM THE SAME BUILDING HAS ACTUA LLY BEEN DISTRIBUTED AMONG THE CHILDREN. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 15/03 /2019) SD/. ( T. S. KAPOOR ) ACCOUNTANT MEMBER DATED:15/03/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW