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2020 (9) TMI 610 - ITAT DELHIDisallowance u/s 14A r.w.r. 8D (3) - HELD THAT:- Assessee company, with its audited accounts, have come up with specific computation that in order to earn the dividend income of ₹ 6,07,08,212/- they have incurred amount of ₹ 3,46,466/- and suo moto disallowed the same, AO was not empowered to invoke the provisions contained under section 14A read with Rule 8D in a mechanical manner without recording his satisfaction that working given by assessee company is not correct. AO has merely recorded that, “I am not satisfied with the correctness of the claim of the assessee”. No reasons as to how and why he has not got satisfied with the correctness of the claim of the assessee. So, we are of the considered view that AO as well as ld. CIT (A) have erred in making/confirming further disallowance u/s 14A read with Rule 8D over and above the disallowance made by the assessee, hence disallowance of ₹ 21,23,629/- made by the AO and confirmed by the ld. CIT (A) is hereby ordered to be deleted. Claim of TDS on deferred revenue - AO has not only disallowed the TDS relating to the deferred revenue but also added the TDS so disallowed as income - HELD THAT:- In view of the undisputed factual position explained by the assessee and following the order passed by the coordinate Bench of the Tribunal in the case of HCL Comnet Systems and Services Ltd. [2020 (1) TMI 403 - ITAT DELHI] we are of the considered view that the TDS credit is to be taken irrespective of the year to which it relates even when a related revenue is booked in subsequent financial year, the assessee is entitled to make claim of the entire TDS in the years of deduction. Assessee is entitled for credit for tax deducted at source proportionately across those years in which income is assessable to tax. Consequently, AO is directed to allow credit of TDS on proportionate basis as required under Rule 37BA (3)(ii).
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