ACIT, New Delhi v. Shri Ahmed Anwar Khan, New Delhi

ITA 4111/DEL/2011 | 2007-2008
Pronouncement Date: 24-11-2011 | Result: Dismissed

Appeal Details

RSA Number 411120114 RSA 2011
Assessee PAN AALPK4806F
Bench Delhi
Appeal Number ITA 4111/DEL/2011
Duration Of Justice 2 month(s) 15 day(s)
Appellant ACIT, New Delhi
Respondent Shri Ahmed Anwar Khan, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 24-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 24-11-2011
Date Of Final Hearing 24-11-2011
Next Hearing Date 24-11-2011
Assessment Year 2007-2008
Appeal Filed On 09-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI RAJPAL YADAV JM & SHRI A.N. PAHUJA AM ITA NO.4111/DEL/2011 ASSESSMENT YEAR:2007-08 A.C.I.T. CIRCLE-44(1) C.R. BUILDING I.P. ESTATE NEW DELHI V/S . SHRI AHMED ANWAR KHAN C-648 NEW FRIENDS COLONY NEW DELHI [PAN : AA LPK4806F ] APPELLANT (RESPONDENT) ASSESSEE BY SHRI SAMEER MALHOTRA AR REVENUE BY MRS. ANUSHA KHURANA DR DATE OF HEARING 24-11-2011 DATE OF PRONOUNCEMENT 24-11-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 9.9.2011 BY THE REVENUE AGAINS T AN ORDER DATED 27 TH JUNE 2011 OF THE LD. CIT(A)-XXX NEW DELHI RAISE S THE FOLLOWING GROUNDS:- 1. THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN ALLOWING 50% CREDIT OF TDS TO SHRI ANWAR AHMED KHAN IGNORING THE FACT THAT THE TDS CERTIFICATE WAS ISSUED IN THE NAME OF SMT. S. A. KHAN ONLY. 2. THE APPELLANT CRAVES THE RIGHT TO ALTER AMEN D ADD OR SUBSTITUTE THE GROUNDS OF APPEAL.. 2. FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT TH E RETURN DECLARING INCOME OF ` 8 77 390/- FILED ON 28.1.2008 BY THE ASSESSEE WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME T AX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] ISSUED ON 18.7.2008. SUBSEQUENTLY ASSESSMENT WAS COMPLETED VIDE ORDER DATED 23 RD DECEMBER 2009 DETERMINING INCOME OF ` 17 40 035/-. INTER ALIA 50% OF THE RENTAL INCOME AMOUNTING TO ` 7 95 000/- FROM HOUSE PROPERTY SITUATE AT C-69 NIZAMUDIN EAST WAS ADDED IN THE INCOME OF THE ASSESSEE THE LATTER BEING THE CO-OWNER.. HO WEVER TDS CERTIFICATE BEING IN ITA NO.4111/DEL./2011 2 THE NAME OF SMT. S. A. KHAN THE ASSESSING OFFICER [AO IN SHORT] DID NOT ALLOW CREDIT FOR TDS. LATER THE ASSESSEE FILED AN APPLI CATION DATED 6.1.2010 U/S 154 OF THE ACT SEEKING CREDIT FOR 50% OF THE TDS DEDUCTI ON FOR HOUSE TAX AND DEDUCTION U/S 24(A) OF THE ACT BESIDES POINTING OUT THAT RENTAL INCOME SHOULD BE ADOPTED AT ` 7 24 476/- PROPERTY HAVING BEEN LET OUT FROM MAY 20 06 ONWARDS .THE ASSESSEE SUBMITTED THAT THE LEASE DEED WAS IN THE N AME OF THE ASSESSEE AND HIS WIFE. HOWEVER THE AO WHILE ADOPTING RENTAL INCOME AT ` 7 28 750/- ALLOWED DEDUCTION FOR PROPERTY TAX AND REPAIRS; BUT DID NOT ALLOW CREDIT FOR TDS SINCE THE TDS CERTIFICATE FOR MONTHLY RENT WAS IN THE NAME OF SMT. S. A. KHAN AND NOT THE ASSESSEE. INTER ALIA THE AO OBSERVED THAT THE ASSE SSEE DID NOT FURNISH ANY EVIDENCE THAT CREDIT FOR ENTIRE TDS HAD NOT BEEN TA KEN IN THE RETURN OF INCOME FILED BY SMT. S. A. KHAN. 3. ON APPEAL THE LD. CIT (APPEALS) FOUND THAT THE LEASE DEED WAS EXECUTED IN BOTH THE NAMES VIZ. SHRI AHMED ANWAR KHAN AND S MT. S. A. KHAN AND THE PROPERTY WAS ALSO REGISTERED IN THEIR NAMES. IN THE SUBSEQUENT ASSESSMENT YEARS RENTAL INCOME HAS BEEN DIVIDED EQUALLY BETW EEN THE TWO . THE ASSESSEE ALSO POINTED OUT THAT A SEPARATE APPLICATION U/S 15 4 OF THE ACT HAS ALSO BEEN FILED IN THE CASE OF MRS. SA KHAN. SINCE 50% INCOME HAS B EEN ASSESSED IN THE HANDS OF THE ASSESSEE CREDIT FOR 50% OF THE TAX DEDUCTED AT SOURCE HAS TO BE ALLOWED IN HIS CASE THE ASSESSEE POINTED OUT. IN THE LIGHT OF THESE SUBMISSIONS THE LD. CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE INTER AL IA SINCE SHARE OF THE ASSESSEE IN THE INVESTMENT IN PLOT AND CONSTRUCTION OF BUILDING BEING 50%. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAIN ST THE AFORESAID FINDINGS OF THE LD. CIT (APPEALS). THE LD. DR SUPPORTED THE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE CONTENDED THAT 50% O F THE RENTAL INCOME HAVING BEEN ASSESSED IN THE HANDS OF THE ASSESSEE CREDIT FOR THE CORRESPONDING TAX DEDUCTED AT SOURCE HAS TO BE ALLOWED IN HIS CASE IN TERMS OF PROVISIONS OF SECTION 199 OF THE ACT READ WITH THE RELEVANT INCOME TAX RU LES 1962[HEREINAFTER REFERRED TO AS THE RULES]. ITA NO.4111/DEL./2011 3 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AT THE OUTSET WE FIND THAT SECTION 199 OF THE ACT GOVERNS THE PROVISIONS RELATING TO CREDIT FOR TAX DEDUCTED AT SOURCE. THERE IS NO D ISPUTE THAT IN TERMS OF THE EXTANT PROVISIONS OF SECTION 199(1) OF THE ACT 'A NY DEDUCTION MADE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII OF T HE ACT 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 ............ A ND CREDIT SHALL BE GIVEN TO HIM FOR THE AMOUNT SO DEDUCTED ON THE PRODUCTION OF THE CERTIFICATE FURNISHED UNDER SECTION 203 IN THE ASSESSMENT MADE UNDER THIS ACT F OR THE ASSESSMENT YEAR FOR WHICH SUCH INCOME IS ASSESSABLE. THE SECOND PROVISO TO SECTION 199 OF THE ACT READS AS UNDER: PROVIDED FURTHER THAT WHERE ANY PROPERTY DEPOSIT SECURITY UNIT OR SHARE IS OWNED JOINTLY BY TWO OR MORE PERSONS NOT C ONSTITUTING A PARTNERSHIP THE PAYMENT SHALL BE DEEMED TO HAVE BE EN MADE ON BEHALF OF AND CREDIT SHALL BE GIVEN TO EACH SUCH PERSON IN THE SAME PROPORTION IN WHICH RENT INTEREST ON DEPOSIT OR ON SECURITY OR INCOME IN RESPECT OF UNIT OR DIVIDEND ON SHARE IS A SSESSABLE AS HIS INCOME. 5.1 IN THE INSTANT CASE THE LD. CIT(A) HAS MER ELY GIVEN EFFECT TO THE PROVISIONS CONTAINED IN THE AFORESAID PROVISO AND ALLOWED CRED IT FOR TDS IN THE HANDS OF THE ASSESSEE IN WHOSE HANDS INCOME HAS BEEN ASSESSED.. SINCE THE LD. DR HAS NOT PLACED ANY MATERIAL BEFORE US SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER WE ARE NOT INCLINED TO INTERFERE. HOWEVER THE AO IS DIRECTED TO ENSURE THAT CREDIT FOR TDS ALLOWED TO THE ASSESSEE SHOULD NOT BE ALLOWED AGAIN IN THE CASE OF HIS WIFE MRS. SA KHAN. 5.2 WE MAY POINT OUT THAT THE FINANCE ACT 20 08 HAS SUBSTITUTED SECTION 199 WITH EFFECT FROM 1-4-2008 AND THE CBDT HAS BEEN EMP OWERED U/S 199(3) OF THE ACT FOR THE PURPOSES OF GIVING CREDIT IN RESPECT O F TAX DEDUCTED OR TAX PAID IN TERMS OF THE PROVISIONS OF CHAPTER XVII-B SO AS TO 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 SECTION 195(1) AND SECTIO N 195(2) AND ALSO THE ITA NO.4111/DEL./2011 4 ASSESSMENT YEAR FOR WHICH SUCH CREDIT MAY BE GIVEN. THE CBDT HAS SINCE INSERTED RULE 37BA IN THE RULES. IN TERMS OF PROVIS ION CONTAINED IN CLAUSE (D) OF RULE 37BA(2) OF THE RULES IF THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE IS ASSESSABLE IN THE HANDS OF A PERSON OTHER THAN THE DEDUCTEE CREDIT FOR TAX DEDUCTED AT SOURCE HAS TO BE GIVEN TO THE OTHER PERSON WHERE THE INCOME FROM A PROPERTY HELD IN THE NAME OF A DEDUCTEE IS OWNED JOINTLY BY THE DEDUCTEE AND OTHER PERSON AND THE INCOME IS ASSESSABLE IN TH EIR HANDS IN THE SAME PROPORTION AS THEIR OWNERSHIP OF THE ASSET. 5.3 IN VIEW OF THE FOREGOING WE DO NOT FIND ANY INFIRMITY IN THE APPROACH OF THE LD. CIT(A).THEREFORE GROUND NO. 1 IN THE APPEAL IS DISMISSED. 6. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE U S IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL ACCORDINGLY THIS GROUND IS ALSO DISMISSED. 7. IN THE RESULT APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) *MEHTA * COPY OF THE ORDER FORWARDED TO :- 1. A.C.I.T. CIRCLE-44(1) C.R. BUILDING I.P. ESTATE NEW DELHI 2. SHRI AHMED ANWAR KHAN C-648 NEW FRIENDS COL ONY NEW DELHI. 3. CIT(A)-XXX NEW DELHI. 4. CIT CONCERNED. 5. DR ITAT A BENCH NEW DELHI 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT DELHI ORDER PRONOUNCED IN OPEN COURT