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2016 (9) TMI 1186 - AT - Income TaxReopening of assessment - Held that:- There is no bar under the I.T. Act, 1961 regarding issue of notice u/s 148 of the Act after completion of assessment u/s 143(1) of the Act. The Assessing Officer had satisfied the ingredients of section 147 of the Act and therefore, it was open to the Assessing Officer to exercise that power, not with-standing the fact that there were other remedies open to him under the Act. Taxability on amount received - relevant assessment year - amount admittedly pertains to more than fifteen earlier years - credit of tds - Held that:- The Hon’ble Supreme Court in Rama Bai VS CIT (1989 (11) TMI 2 - SUPREME Court ) has held that Interest on enhanced compensation awarded under the Land Acquisition Act accrues year after year and not on the date of granting enhanced compensation. In view of this articulation of law by the Hon'ble Apex court, there can be no question of charging the entire amount of interest to tax in the year of receipt as has been done by the authorities below. Tthus CIT(A) was not justified in charging to tax the amount of interest received in the year, which obviously did not relate to the year in question. A careful perusal of the provision indicates that the credit for TDS can be allowed only for the assessment year for which the corresponding income is offered for taxation. There can be no question of allowing credit for the TDS in the assessment of a year for which the matching income is not offered for taxation. In other words, both the income and credit for TDS go hand in hand and cannot be disassociated from each other. As the amount of interest on which tax has been withheld is not chargeable to tax in the instant year, the assessee cannot equally be allowed credit for TDS on such interest income against other income. When confronted with this position, the ld. AR contended that since the AO allowed credit for such TDS, the Tribunal cannot disallow the same. We are not convinced with the submission. The patent reason for not disallowing credit for such TDS by the AO is that he charged to tax the entire interest income in the year in question and impliedly following the prescription of section 199, allowed the credit for TDS. As the interest income is held to be not chargeable to tax in the year under consideration, the assessee cannot be allowed to avail credit for TDS on such interest income against tax on his other income. To sum up, the interest income of Rs.Rs.13,91,472/ - is not chargeable to tax and further no credit for TDS of Rs.l,41,825 on such interest can be allowed in the instant year.
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