K. Venkatesan (HUF) Vs ACIT (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT), Chennai Bench, has issued a ruling in the case of K. Venkatesan (HUF) versus the Assistant Commissioner of Income Tax (ACIT), National Faceless Appeal Centre (NFAC), Delhi, concerning Assessment Year 2023-24. The Tribunal allowed the assessee’s appeal, mandating the tax authorities to grant full credit for Tax Deducted at Source (TDS) amounting to Rs. 11,70,000. This amount included Rs. 10,50,000 deducted on the sale of agricultural land, which the assessee contended was exempt from taxation. The decision effectively overturns the previous orders by the Commissioner of Income Tax (Appeals) [CIT(A)] and the Central Processing Centre (CPC), both of which had denied the TDS credit based on a perceived mismatch between the TDS claim and corresponding income in the income tax return.
Background of the Case: Inadvertent TDS on Exempt Income
The appellant, K. Venkatesan (HUF), submitted its income tax return for Assessment Year 2023-24 on July 30, 2023, declaring an income of Rs. 12,22,520. The declared income comprised Rs. 8,40,000 from house property, Rs. 3,82,524 from other sources (interest income), and Rs. 4,13,150 as agricultural income.
During the financial year 2022-23, the assessee sold an agricultural land parcel, measuring 2.28.5 acres, situated in Yercaud. The sale was made to M/s. Ebenezer Marcus Trust for a consideration of Rs. 10.50 crores. The purchaser, M/s. Ebenezer Marcus Trust, proceeded to deduct TDS at 1%, totaling Rs. 10,50,000, under Section 194IA of the Income Tax Act, 1961.
