Joginder Singh, J.M.: This appeal is by Revenue (sic-assessee) challenging order of learned CIT(A), dt. 29th March, 2004 on following grounds: "1. That learned CIT(A) has erred in concurring with TDS/TRO in confirming his action under s. 194-I r/w 201(1A) of IT Act, 1961 on facts and circumstances of present case. (a) That learned CIT(A) has further erred in concurring with TDS/TRO b y holding that appellant has made short deduction of TDS under s. 194-I and thereby taking action under s. 201(1A). (b) That without prejudice to above order passed under s. 201(1A) is bad in law and illegal. (c) That without prejudice to above appellant disputes quantum and rate of interests levied as excessive. That learned CIT(A) has erred in concurring with TDS/TRO in holding appellant in default in respect of TDS on payments of rent and thereby creating demand to extent of Rs. 2,60,954. That without prejudice to above, learned CIT(A) has erred in concurring with TDS/TRO by holding that even if recipients of income have duly paid their taxes as per law bank can still be held defaulter for short deduction and alleged less tax still needs to be paid by appellant-bank. That learned CIT(A) has erred in concurring with TDS/TRO by holding that interest under s. 201(1A) for alleged default of short deduction of TDS is payable even in case where tax alleged to be in default cannot be recovered from appellant as tax on impugned payment of rent has already been paid by recipient of income. That learned CIT(A) has erred in confirming orders of TDS/TRO being beyond/in excess of jurisdiction and also being barred by limitation. That TDS/TRO exceeded his jurisdiction by passing order in excess o f jurisdiction as period covered for inspection by TDS/TRO is beyond his jurisdiction, which is confined to only those years for which proceedings are pending. That appellant craves leave to add, amend or delete any ground of appeal before disposal of case." assessee is bank (which) paid building rent to Sh. Vinod Kumar and Shiv Charan from financial years 1996-97 to 2003-04 below Rs. 1.20 lakhs each w.e.f. 1st April, 1996 till date of inspection, i.e., 16th Oct., 2003. As per AO, in view of provisions of s. 194-I of Act, assessee-bank was required to deduct tax at rate of 20 per cent on rental payment. information filed by bank reveals that either assessee deducted TDS at lower rate, i.e., 15 per cent or made no deduction of TDS. AO raised demand of Rs. 2,60,954 against assessee. detail of demand and relevant period h s been detailed at pp. 1-4 of order under s. 201(1A) of Act. assessment order was carried in appeal before learned CIT(A) where it was partly allowed. Now, assessee is in further appeal before Tribunal. During arguments, we have heard Ms. Rimpy Chaudhary, learned chartered accountant for assessee, and Smt. Preeti Garg, learned Departmental Representative for Revenue. gist of arguments on behalf of assessee is that provisions of s. 194-I are not attracted to facts of present case. payment was made through draft, that there are two co-owners of building, and rental amount has been duly declared in their returns which has been accepted by Department. Ms. Chaudhary contended that their share is definite and ascertainable, rent was less than Rs. 1.20 lakh, so no TDS is to be deducted. Our attention was also invited to Circular No. 715, dt. 8th Aug., 1995 [(1995) 127 CTR (St) 13] issued by CBDT, that ownership is to be determined as per s. 26 of Act. It was also contended that both persons are having separate bank accounts and rent has been received through banking channel. On other hand, learned Departmental Representative for Revenue contended that no lease deed was produced by assessee, shares are not determinate, thus, provision of s. 194-I is applicable. It was also contended that s. 201 is mandatory. Reliance was also placed on decision pronounced in case of Kanoi Industries (P) Ltd. vs. Asstt. CIT (2003) 182 CTR (Cal) 427: (2003) 261 ITR 488 (Cal). In nutshell, learned Departmental Representative for Revenue defended order of AO. We have considered rival submissions. At outset, learned counsel for assessee did not argue grounds 2 to 8 in grounds of appeal, so same are dismissed as not pressed. only ground remains for our consideration is that learned CIT(A) erred in concurring with TDS/TRO in confirming his action under s. 194-I r/w 201(1A) of Act. Undisputedly, assessee-bank paid building rent to Sh. Vinod Kumar and Sh. Shiv Charan from financial years 1996-97 to 2003-04 and AO created demand of Rs. 2,60,954 on account of TDS and interest under s. 201. Before going into much deliberation, we are supposed to see whether s. 194-I is applicable to present facts of case, which is as under: "The principal officer of Indian company or company which has made t h e prescribed arrangements for declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment in cash or before issuing any cheque or warrant in respect of any dividend or before making any distribution or payment to shareholder, who is resident in India of any dividend within meaning of sub-cl. (a) or sub-cl. (b) or sub-cl. (c) or sub-cl. (d) or sub-cl. (e) of cl. (22) of s. 2, deduct from amount of such dividend, income-tax at rates in force: Provided that no such deduction shall be made in case of shareholder being individual, if (a) dividend is paid by company by account-payee cheque; and (b) amount of such dividend or, as assessee may be, aggregate of amounts of such dividend distributed or paid or likely to be distributed or paid during financial year by company to shareholder, does not exceed two thousand five hundred rupee: Provided further that provisions of this section shall not apply to such income credited or paid to (a) Life Insurance Corporation of India established under Life Insurance Corporation Act, 1956 (31 of 1956), in respect of any shares owned by it or in which it has full beneficial interest: (b) General Insurance Corporation of India (hereafter in this proviso referred to as Corporation) or to any of four companies (hereafter in this proviso referred to as such company), formed by virtue of schemes framed under sub-s. (1) of s. 16 of General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), in respect of any shares owned by corporation or such company or in which Corporation or such company has full beneficial interest:" [Note: Sec. 194 is inadvertently quoted in lieu of s. 194-I Ed.] If facts of this appeal are analysed with reference to s. 194-I, it is seen that rent has been paid by cheque/draft. So proviso is not applicable. case of assessee being co-ownership is to be determined as per s. 26 of Act. Undisputedly, rent has been received through banking channel. On specific query from Bench, learned counsel for assessee has produced statement of account from OBC for period between 1st Jan., 2002 to 31st Oct., 2003. account No. 4653 pertains to Sh. Shiv Charan, S/o Sh. Om Parkash and account No. 4654 pertains to Sh. Vinod Kumar, S/o Sh. Om Parkash. On perusal of these statements, rent has been credited in individual accounts on month-wise basis. fact that individual returns of both these persons, i.e., Sh. Shiv Charan and Sh. Vinod Kumar have been individually filed and accepted by Department was not controverted by learned Departmental Representative for Revenue. Sec. 26 of Act deals where property is owned by co-owners and respective shares which are definite and ascertainable. Explanation to s. 26 clearly says such shares shall be computed as if each such person is individually entitled to relief provided in that sub-section. In present case, both co-owners have duly declared their income individually and same has been accepted by Department. From these facts, it is clearly oozing out that their shares are definite and ascertainable. CBDT has issued Circular No. 715, dt. 8th Aug., 1995 making clarifications on various provisions relating to tax deduction at source which are available in (1995) 127 CTR (St) 13: (1995) 215 ITR (St) 12. In reply to question No. 2, in said circular where limit of Rs. 1.20 lakh per annum would apply strictly on each co-owner of property, it has been pointed out that under s. 194- I, tax is deductible from payment by way of rent, if such payment to payee during year is likely to be Rs. 1.20 lakh or more. If there are number of payees, each having definite and ascertainable share in property, limit of Rs. 1.20 lakh will apply to each of payee/co-owners separately. payer and payee are advised not to enter in sham agreements to avoid TDS provisions. This is not case of Revenue that it is sham transaction or agreement is bogus one or concocted one. building is under ownership of Sh. Shiv Charan and Sh. Vinod Kumar which has been given on rent to assessee-bank. It is not case that payers and payee are close relatives and some sham transactions might have been entered upon to avoid tax. During argument, learned counsel for Revenue relied upon decision of Hon ble High Court of Calcutta in case of Kanoi Industries (P) Ltd. vs. Asstt. CIT (supra) wherein it was held that failure to deduct tax or failure to pay after deduction, interest under s. 201(1)(a) of Act is mandatory and automatic, which in our humble opinion, is not going to help Revenue because said section postulates liability to pay interest at rate provided on amount deductible as tax from date on which such was deductible until it is actually paid, if assessee in default does not deduct tax. Similarly, assessee in default is liable to pay interest in same manner if assessee in default after deducting fails to pay tax. No payment of tax on account of any other reason after deduction makes assessee in default liable to pay interest on amount deductible made recoverable as charge on asset of assessee in default under sub-s. (2) of said section. charging of interest has been made continuous till it is actually paid. legal fiction is created under s. 201 by deeming clause that person liable to deduct shall be assessee in default. expression actually paid is outer limit for purpose of calculation of interest but in present case since assessee is not liable to deduct tax on facts and circumstances of case which have been narrated before us, this judicial pronouncement will not help Revenue being different on facts. Hon ble apex Court in case of CIT vs. Bijoy Kumar Almal (1995) 125 CTR (SC) 418: (1995) 215 ITR 22 (SC) has affirmed decision of Hon ble High Court of Calcutta in CIT vs. Bejoy Kumar Almal (1977) 106 ITR 743 (Cal) and also approved cases of CIT vs. Smt. Shanti Devi Jalan (1983) 139 ITR 152 (Cal), CIT vs. Sham Sunder (1980) 122 ITR 541 (Del) and Tulsi Dass Kila Chand vs. CIT (1987) 63 CTR (Bom) 324: (1988) 171 ITR (Sh.N) 5. Hon ble apex Court held that co-owner of house property is justified in claiming deduction provided for by s. 23(2) be allowed to him separately from out of his share in annual value of said house property inasmuch as he had definite and ascertainable share therein. language of s. 26 of Act inserted w.e.f. 1st April, 1976 even without taking into account Explanation is clear enough. It provides that (where property consisting of building or building and lands appurtenant thereto) is owned by two or more persons and their respective shares are definite and ascertainable, they shall not, in respect of such property, be assessed as AOP and that share of each such person in income from property as computed in accordance with s. 22 to 25 shall be included, in his total income. Secs. 22 to 25 prescribe manner in which income from house property has to be determined. In view of these facts, we fully agree with contention of learned counsel for assessee. In view of these facts, ground No. 1 raised in ground of appeal is allowed and ground Nos. 2 to 8 are dismissed as not pressed. Appeal of assessee is partly allowed. Before we part with, we record our appreciation for learned counsel for assessee, Ms. Rimpy Chaudhary for assisting Bench in coming to particular conclusion. *** ORIENTAL BANK OF COMMERCE v. INCOME TAX OFFICER