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2021 (6) TMI 65 - AT - Income TaxCredit of TDS - whether the credit of the TDS has to be allowed corresponding to the income offered or the income has to be computed according to the amount of TDS which has been deducted and claimed by the assessee? - HELD THAT:- AO was required to exclude the credit of the TDS, but instead, he added the advance amount as income of the assessee in the year under consideration. The action of the Assessing Officer without any reasoning is not justified. Simultaneously, the claim of the entire amount of the TDS by the assessee in the year under consideration is also not justified. CIT(A) noted this fact, however, she upheld the addition proposed by the Assessing Officer instead of restricting the credit of the TDS. The duly of the AO is to decide, whether particular receipt is in the nature of taxable income and raise tax liability corresponding to that. He cannot assess particular receipt as income merely on the ground that tax on such receipt has been deducted by the deductor. In the case, the AO was required to examine whether the work was performed by the assessee for entire amount or for the amount of ₹ 48,06,843/- only. Without examining that issue, he is not justified in holding the advance amount as taxable receipt of the year. In the case of Varsha G. Salunke [2005 (9) TMI 226 - ITAT BOMBAY-F] also the payment was received in one year, however, bills for part of payment received in subsequent years. The Tribunal directed to give credit of the TDS the year in which income was offered for taxation. We feel it appropriate to restore the issue in dispute to the file of the Assessing Officer, with the direction to the assessee to demonstrate taxability/non-taxability of amount in the year under consideration with the help of documentary evidences including, bills/invoice, proof of work performed etc. Then, the Assessing Officer shall decide the issue in accordance with law. Ground No. 1 of the appeal is accordingly allowed for statistical purposes.
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