TMI Blog2003 (3) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... ived rent of Rs. 2,04,921 from the FCI. As per provisions of s. 194(1), FCI had deducted tax at source amounting to Rs. 40,984 from the rent and certificate was issued in the name of "M/s Jawahar Jindal Co-owners, Nabha". The assessee had filed the return in the status of AOP declaring therein nil income with the remarks that as per provisions of s. 26 of the IT Act, rental income was assessable in the hands of the co-owners and not in the hands of the AOP. The return in the status of an AOP was filed with a view to claim refund in respect of tax deducted at source. The AO processed the return under s. 143(1)(a) and brought to tax income from house property in the hands of the AOP on which tax payable was determined at Rs. 73,822. After a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in the rental income. It was submitted that prior to 1st April, 1997, the assessee could claim credit only in a case where tax had been deducted. Therefore, it was submitted that there was no mistake in the order of the AO in granting refund to the AOP and proposed rectification was uncalled for. However, these submissions did not find favour with the AO who held that credit for TDS was to be allowed in the hands of the co-owners in proportion to their share in rental income and not in the hands of the AOP. Accordingly, he withdrew the refund granted to the assessee. 3. Aggrieved, the assessee carried the matter in appeal before the Dy. CIT(A). The Dy. CIT(A) upheld the order of the AO by recording the following findings in para 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the AOP. He drew our attention to second proviso to s. 199 amended w.e.f. 1st April, 1997, providing for allowing credit on proportionate basis in respect of rental income of property jointly owned. He stated that prior to this amendment, such credit was to be allowed only in respect of security or share in a company jointly owned and not in respect of house property. Therefore, the assessee had rightly claimed the credit for TDS in the hands of the AOP. He further submitted that the issue being debatable, the same fell outside the provisions of s. 154 of the Act. 5. The learned Departmental Representative, Smt. Geet Mala, on the other hand, heavily relied on the orders of authorities below. She drew our attention to the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unit-holder. Second proviso to s. 199, as it stood prior to 1st April, 1997, provided that where the security or share in a company is owned jointly by two or more persons not constituting partnership, the payment shall be deemed to have been made on behalf of, and credit shall be given to, each such person in the same proportion in which the interest on such security or dividend on such share is assessable as his income. However, such proviso did not cover any property, deposit or unit jointly owned by two or more persons. The scope of proviso was also enlarged w.e.f. 1st April, 1997, so as to cover, inter alia, any property jointly owned by two or more persons. Therefore, prior to 1st April, 1997, it was not clear whether the credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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