TDS : S. 194I of Income-tax Act, 1961 : A.Ys. 2001-02 and 2002-03 : Premises owned by co-owners : Limit of Rs.1,20,000 is applicable to each co-owner.

[CIT v. Manager, SBI; 226 CTR 310 (Raj.)]

In an appeal filed by the Revenue u/s.260A of the
Income-tax Act, 1961 the following question was raised :

“Whether on the facts and in the circumstances of the
case, the learned Tribunal was legally justified in holding with regard to
TDS u/s.194-I of the Income-tax Act, 1961 that when there are a number of
owners of a property, the limit or ceiling will apply to each and every
owner separately, notwithstanding the fact that the amount has been paid by
crediting the aggregate sum in the joint account of the owners ?”

The Rajasthan High Court held as under :

“(i) The property was of late Smt. Tej Roop Kumari, who
created registered trust in her lifetime on 10th October 1990, according to
which, her three sons and one grandson became absolute owners of the
property in definite shares.

(ii) Learned counsel for the appellant has placed
reliance on Smt. Bishaka Sarkar v. UOI; 219 ITR 327 (Cal.), in which
it was held that rent paid to co-owners cannot be split up and co-owners
would come within the expression ‘other cases’, so deduction of tax at the
rate of 20% was justified.

(iii) It appears that the learned Judge of Calcutta High
Court did not take note of law laid down by the Apex Court in CIT v.
Bijoy Kumar Almal; 215 ITR 22 (SC), in which it was held that where
property is owned by two or more persons and their respective shares are
definite and ascertainable, they shall not, in respect of such property, be
assed as an AOP and that the share of each such person in the income from
that property shall be included in his total income, meaning thereby,
liability to deduct on the rental income received by each co-owner was to be
judged.

(iv) Thus, limit of Rs.1,20,000 was applicable to each
co-owner, and thus, no tax was to be deducted at source, and the learned
Tribunal has not committed any error in accepting the appeals of the
assessee.”