- Sec 199 provides for giving credit only to persons from whose income tax is deducted
- Now let’s take a case of rental sharing with a co-owner, where the first owner receives full rental after TDS and part 50% with the Co-owner, What amount will the first owner offer as income and claim TDS? Similar situations can arise in cases of agency contracts where agents receive income on behalf of the principal after deduction of TDS
- As per Naresh Bhavani’s case, credit can be given to the person in whose hands income is taxable
- In the case of Ganesh Narayan Brijlal, Ltd. held that full credit is available to the first owner and in the case of Punjab Financial Corp. it was held that credit should be passed on to the Co-owner
- It is also a fact that although Credit cannot be denied just because it is not reflected in 26AS – Sumit Devendra Rajani’s case, the ground reality is different. Therefore to claim credit, TDS should be reflected in 26AS
- In such a situation Rule 37BA play an important role which prescribes a method for reflecting credit in Co-owner’s 26AS account
