TaxTMI 
TaxTMI 
2014 (10) TMI 217
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....owners was to be taxed mandatorily in the hands of respective co-owners as per provisions of section 26 of the I.T. Act and particularly when the income was also offered by respective co-owners in their individual return of Income. The act of confirming assessment in the hands of co-ownership would amount to double taxation of same income. The directions be issued to treat the income of appellant as NIL and the learned AO be directed to issue the refund of tax incorrectly collected." Identical ground was raised in the case of Praful Ramesh Shah & Others and amount involved therein is Rs. 3,76,340/-. 3. Facts necessary for disposal of the appeals are stated in brief. According to the learned counsel for the assessee a group of people purchased property in the complex known as Sai Shradhha; 12 persons, including HUFs, purchased "B" Wing Ground Floor portion of Sai Shradhha and as per the agreement it was to be enjoyed as co-owners and it was let out. Shri Praful Ramesh Shah and Shri Ritesh Ramesh Shah are co-owners in the said building. 4. Similarly, another set of 12 persons, including some HUFs, have jointly purchased the premises known as "C' Wing, Ground Floor of the building....
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....come of respective co-owners under section 26 of the I.T. Act. It was also stated that the return of income showing Nil income was filed by the coowners collectively to meet the legal compliance of filing returns. The respective co-owners have filed their returns of income showing their share in co-ownership income. The returns of income in these cases were filed for the sake of convenience only to comply with the obligation. It was also contended that the total income is to be assessed as Nil as there cannot be any double taxation. 8. The learned CIT(A) observed that the income returned by the assessee has to be accepted by the AO with appropriate adjustments, under section 143(1), and since there is no tax paid thereon, demand was raised under section 143(1) of the Act; no adjustment can be made in the return filed except the adjustments mentioned in section 143(1) of the Act. Allocation of rental income amongst the co-owners is not one such adjustment that can be made under section 143(1). Therefore no error is stated to have been committed by the AO while determining the income under section 143(1) of the Act. He accordingly upheld the procedure followed by the AO. 9. Aggriev....
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....individual by status though the PAN card specifically mentions that it is allotted to a Firm which can be conspicuously noticed by the fact that the original PA Number was struck off and replaced by the new PA Number containing "F" as fourth digit, under the signature of the AO. Despite that the AO observed that the status of the assessee is group of individuals whose shares are determinate and ascertainable and hence no income is assessable to tax. Similarly, the assessees have also placed before the Tribunal a copy of the order of the Appellate Authority (CIT(A) 25, Mumbai) in the case of Jayesh P. Shah & Others (HUF) for AY 2010-11 wherein a similar claim was accepted by the learned CIT(A). He, thus, submitted that though the return was filed in the status of individual, under section 26, the income is assessable to tax in the hands of respective co-owners in which event the Nil income declared by these assessees ought to have been accepted. 11. On the other hand, the learned D.R. submitted that if the income is earned by a group of persons it can either be classified as Association of Persons or Body of Individuals. If it is an Association of Persons and the share of each indi....
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.... earn the income, or would have invested time in understanding as to whether it would need to be considered as AOP/BOI; as can be seen from the arguments advanced before this Tribunal and before the Tax Authorities, the case of the assessees was that the co-owners have jointly earned the income - presumably in the status of Association of Persons - but the shares of each individual is determinate, and there is no common and concerted action to earn the income, and hence the income is to be segregated under section 26 of the Income Tax Act for being assessed in the hands of each individual. At no stage of the proceedings the assessees claimed that they are Association of Persons or Body of Individuals or Firm but with the help of PAN they have filed the returns in individual status. Ironically, in the case of Shri Ritesh Ramesh Shah & Others the AO, despite being fully aware of the fact that the PAN Card was obtained in the name of Firm, not only accepted the status as individual but also observed that as individuals they have earned group income but their shares are determinate and assessable. Similar view appears to have been taken in the case of another assessee for AY 2010-11 (J....