The husband would be qualified for taking the credit of TDS on the interest made on the amount gifted to his wife, Income Tax Appellate Tribunal’s (ITAT), Pune Bench ruled.
The two-member bench of R.S. Syal (Vice President) and S.S. Viswanethra Ravi (Judicial Member) ruled that assessability is there in the hands of somebody other than the deductee for the income on which the tax would get deducted at source, the credit for the proportionate tax deducted at source will be provided to that other individual instead the deductee.
The taxpayer has furnished the return which shows the total income. For the tax deducted at source on the interest income the intimation of disallowing the credit was issued.
As per CPC, Form No. 26AS doesn’t comprise or included only a portion of the TDS established in Schedule TDS 1/TDS 2/TCS.
Against the intimation issued u/s 143(1) the taxpayer appealed, furnishing the CIT(A) that he gifted some amount to his wife, out of which she incur the deposits with the State Bank of India.
She made the total interest income post-deducting tax at source according to Form No. 26AS. As the deposit was made out of the gift that has been made through him, the taxpayer comprises the proportionate interest income in his total income and indeed claimed the credit for the proportionate tax deducted at source.
The provisions of rule 37BA(2) did not comply, CIT(A) revealed, hence the taxpayer was not qualified for the credit for the tax deduction at source.
ITAT ruled that only due to the wife of the taxpayer do not file the declaration to the bank in the terms of proviso to rule 37BA(2), the amount of tax deducted at the source that would be with the council not being permitted to stay with the same eternally without permitting any related credit to the individual who would be referred to the tax for the income.
Read Also: Acceptance of TDS Credit is Proposed When Taxed Along With TDS
“Section 199 talks of granting credit for tax deducted at source to the other person, who is lawfully taxable in respect of such income, and we are satisfied that the matching credit for tax deducted at source must also be allowed to him. In view of the fact that the tax of Rs. 2,80,656 has actually been deducted at source on the interest income of Rs. 37.42 lacks, we hold that the credit for such TDS should be allowed to the assessee, who has been subjected to tax in respect of such income,” the tribunal articulated.
| Case Title | Anil Ratanlal Bohora Versus ACIT |
| Citation | ITA No.675/PUN/2022 |
| Date | 19.01.2023 |
| Appellant | Pramod Shingte |
| Respondent | Ramnath P. Murkunde |
| Pune ITAT | Read Order |
