2023 (2) TMI 456 - AT - Income Tax

Credit for Tax Collected at Source (TCS) - credit for TCS made in the hands of the partner - Assessee is a partnership firm - claim for credit of TCS was not granted because the TCS certificate was in the name of the partner Mr.Raju S.Shetty - liquor licence stands in the name of Shri. Raju S. Shetty, one of the partners of the firm and firm utilized the said licence in the business of selling liquor - purchase of liquor for sale was made from the Karnataka State Beverages Corporation Ltd., (KSBCL) - HELD THAT:- Identical issue with regard to claim of TCS in the hands of the partnership firm when the licence stands in the name of the partners came up for consideration. The Hon’ble ITAT, Jaipur Bench in Jai Ambey Wines [2017 (1) TMI 986 - ITAT JAIPUR] after referring to the statutory provisions viz., sections 190, 199, 206C of the Act and Rule 37BA(2)(i) of the Income Tax Rules, 1962 (hereinafter called ‘the Rules’), held that the assessee firm should be given benefit of credit for TCS made in the hands of the partner.

If the ultimate conclusion on an application u/s 154 of the Act can only be one particular conclusion, then even if in reaching that conclusion, analysis has to be done then it can be said that the issue is debatable which cannot be done in proceedings u/s 154 of the Act. Conclusion in the present case can only be one viz., that one person alone is entitled to claim credit for TCS and it is only the assessee who has claimed credit for TCS and not the licencee. In such circumstances, the application u/s 154 of the Act ought to have been entertained by the Revenue.

DR also made submission that the decision of the ITAT, Jaipur Bench, was in relation to provisions of Rule 37BA of the Rules which is applicable to TDS and not to TCS and it is only Rule 37-I of the Rules which is applicable when credit for TCS is claimed. The very basis of the decision of in the case of Jai Ambey Wines [2017 (1) TMI 986 - ITAT JAIPUR] is based on the facts that what is applicable for TDS should also be applicable for TCS and merely because there is no Rule identical to Rule 37BA(2)(i) of the Rules with reference to TCS provisions, it cannot be the basis for the Revenue to deny the legitimate claim for credit of TCS made by an assessee. The assessee should be given the benefit of credit for TCS. The AO is directed to give credit for TCS. Appeals of the assessee are accordingly allowed.