Suresh Chand Agarwal HUF Vs ITO (ITAT Agra)
The appeal before the Income Tax Appellate Tribunal, Agra Bench concerned Assessment Year (AY) 2023–24 and arose from an order passed under section 154 of the Income-tax Act, 1961 by the Centralised Processing Centre (CPC), Bengaluru. The rectification order had been affirmed by the Joint Commissioner of Income Tax (Appeals)-2, Coimbatore.
The assessee is a Hindu Undivided Family (HUF) that owned an immovable property which was subjected to compulsory acquisition. The acquisition proceeds amounted to ₹9.32 crore, on which tax was deducted at source (TDS) at the rate of 1% on two equal portions of ₹4.66 crore each. The TDS of ₹4.66 lakh was deducted in the name of the Karta of the HUF, and another ₹4.66 lakh was deducted in the name of a member of the HUF, Rajni Agarwal. Since the property belonged to the HUF, the assessee claimed that the entire TDS of ₹9.32 lakh was creditable in its hands.
It was undisputed that the compensation received on compulsory acquisition was exempt in the hands of the HUF. Accordingly, the assessee claimed exemption of the income and claimed full credit of TDS of ₹9.32 lakh in its return of income filed on 27.05.2023. The Schedule of TDS accompanying the return clearly reflected this claim.
