Baderunnisa Vs DDIT(CPC) (ITAT Bangalore)
ITAT Bangalore Upholds TDS Claim By Single Heir On Jointly Owned Property Sale Based On Actual Transaction Flow
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai bench addressed a dispute concerning the credit of Tax Deducted at Source (TDS) on the sale of an inherited property, siding with the assessee and overturning a previous decision by the Commissioner of Income Tax (Appeals) [CIT(A)] and the Centralized Processing Centre (CPC).
The case involved an individual assessee who, along with her four sons and one daughter, inherited a house property following the death of her husband. The inheritance followed Muslim religious practices, with the assessee receiving a 12.50% share, each of the four sons receiving 19.44%, and the daughter receiving a 9.74% share.
The jointly owned property was subsequently sold for a consideration of Rs. 2 crores during the assessment year 2023-24. A key point of contention arose from the transaction’s execution: the entire sale consideration, after the deduction of TDS amounting to Rs. 2 Lakhs, was deposited solely into the bank account of the appellant assessee. Consequently, the TDS certificate was also issued exclusively in her name.
According to the assessee, she undertook the responsibility of computing the total capital gain arising from the sale and the corresponding tax liability. This liability was then apportioned among all the legal heirs based on their respective inheritance ratios. The assessee claimed that advance tax payments covering the individual tax liabilities were made by each legal heir. Notably, the other legal heirs paid their full tax dues without claiming any credit for the TDS that had been deducted.
