TDS Credit Allowable to HUF for Sale of Housing Property: ITAT [Read Order]

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that the assessee Hindu Undivided Family (HUF) be allowed with Tax Deducted at Source (TDS) credits upon filing an affidavit by the individual that the income does not belong to him and that he has not claimed credit of TDS.

The assessee M/s. Anant Singhania is a HUF and had filed return of income declaring total income at Rs.36, 18,374. The assessee’s case was selected for limited scrutiny under the e-assessment scheme of 2019.

The Assessing Officer (A.O)passed the assessment order under Section 143(3) read with Sections 143(3A) and 143(3B) of the Income Tax Act,1961 where the A.O. in the computation of the income sheet had denied the TDS credit under Section 194IA of the Income Tax Act amounting to Rs.15 lakhs on the sale of house property and had also levied interest under Sections 234B and 234C of the Income Tax Act.

Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] which stated that the assessee has mentioned the wrong PAN in the sale deed and has directed the assessee to follow the procedure prescribed under Section 37BA(2) of the Income Tax Act for the purpose of getting the TDS credit.

Dharan Gandhi the representative on behalf of assessee filed an appeal before the ITAT and contended that the A.O. has accepted the return of income filed by the assessee but had denied TDS credit in the computation sheet where the TDS is reflected in the individual name.

Furthermore, it was argued that the sale of property belonging to HUF was shown in the books of HUF and capital gains on the said sale was offered to tax in the hands of the assessee HUF.

The Two-Member Bench comprising of Prashant Maharishi, Accountant Member and MS.Kavitha Rajagopal, Judicial Member observed that the assessee has shown Long term capital gain of Rs.13,57,61,063 from the sale of immovable property and is said to have invested Rs.6,35,04,000 in the capital gain account and Rs.50 lacs in bond for which the assessee is said to have claimed deduction under Section 54 and 54EC of the Income Tax Act.

The Tribunal relied on the decision of the Gujarat High Court in Naresh Bhavani Shah (HUF) vs. CIT wherein it was held that, “under special circumstances TDS credit can be given to the assessee HUF upon filing affidavit by the individual that the income does not belong to him and that he has not claimed credit of TDS”.

Hence the bench held that the assessee is entitled to claim TDS for the impugned transaction and the A.O. is directed to allow the TDS credit in the hands of the assessee HUF after verifying that the same was not claimed in the hands of the individual.

To Read the full text of the Order CLICK HERE

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