New Delhi, Sept. 11 -- The tax department cannot tax rental income in the hands of individual landowners if the commercial building was constructed under a joint development agreement (JDA) and the earnings from it have already been disclosed and assessed in the hands of a genuine partnership form, the Income Tax Appellate Tribunal (ITAT) Bangalore has recently ruled.

The tribunal also held that withdrawals by the landowners from the firm's bank account did not, by themselves, justify taxing the rental income in their hands.

The ruling came in a dispute over rental income from a commercial property developed under a JDA. The income tax department had treated the landowners as the actual owners of the building and apportioned the rent am...