INCOME TAX11 Sept 2026
Partnership firm declared rental income, but landowners were taxed again; ITAT Bangalore rules against double taxation | Mint
A commercial building's rent earned under a joint development agreement (JDA) cannot be taxed twice. The Income Tax Appellate Tribunal (ITAT) Bangalore ruled on 21 August that once a genuine partnership firm declared and was assessed on that rent, it cannot be added again to the individual landowners' income. Withdrawals from the firm's account don't change this. If your property sits in a similar firm, keep records tidy.
Key Statutory Highlights
- ITAT Bangalore held that rental income already disclosed and assessed in a genuine partnership firm cannot be taxed again in the hands of the individual landowners.
- The landowners entered into a joint development agreement in March 2005 and later formed a registered partnership firm to construct the building, with rent credited directly to the firm's bank account.
- Withdrawals by owner-partners from the firm's account and property tax paid by the landowners did not by themselves justify taxing the rental income in their hands.
Actionable Advice for Taxpayers / Founders:If your rental property is held through a partnership firm, keep the firm's accounts, returns and rent records clearly documented. Speak to your CA before replying to any notice that tries to tax the same rent in individual hands.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
Share: