Case Law Details
Dhirajlal Savailal Shah Vs ITO (ITAT Ahmedabad)
If the receipt is not liable to tax in the hands of the recipient for any reason, the same cannot be a ground for not granting credit for TDS.
Introduction: The recent verdict by the Income Tax Appellate Tribunal (ITAT) Ahmedabad in the case of Dhirajlal Savailal Shah vs. ITO addresses the validity of claiming TDS credit when income from the sale of agricultural property is not reflected in the income tax return (ITR). This article provides a comprehensive analysis of the case, examining the grounds of appeal, arguments presented, and the tribunal’s decision.
Detailed Analysis: The appeal was filed against the order issued by the National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18. The appellant, an individual, contested the rejection of their claim for TDS credit amounting to Rs. 1,42,500 under section 154 of the Income Tax Act.
The appellant sold agricultural land in a rural area during the assessment year and did not incur capital gains tax. However, the buyer mistakenly deducted TDS on the transaction, which was reflected in Form 26AS. Despite the absence of corresponding income in the ITR due to the agricultural nature of the property, the appellant claimed credit for the TDS deducted.
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