TMI Blog2010 (8) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... xamination of the statutory provisions to answer this legal question, it is evident that the deduction of tax at source is not a levy of tax unless and until it is followed by an assessment order making a charge of tax. Even this is also a settled position that the deduction of tax at source in no way expressly indicates that ipso facto the assessee is entitled for the refund or adjustment of tax of the TDS amount against the income mentioned therein. The provisions relating to Tax Deduction at Source are not the provisions for the computation of income. An income of a taxpayer is not required to be computed merely with reference to the TDS Certificate but assessment of an income is altogether an independent exercise. With this understanding of law if we compare the facts of the case, and then it is evident that the amount which was certified on the TDS Certificate could or could not have been subject to tax in the hands of the assessee-recipient. The deductor had chosen a safe procedure of deduction of tax on the entire amount of freight. Otherwise the freight was to be paid to the truck owners and not to the assessee-company, who is only a conduit in arranging the hiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the business of providing transportation service. 2.1 On perusal of TDS certificates it was noticed by the Assessing Officer that the amount deducted at source was a sum of Rs. 1,52,307 which had covered the income of Rs. 90,95,287. However, it has also been noticed that in the Profit Loss account receipts shown by the assessee were only Rs. 72,70,562. The assessee was asked to reconcile the same. The Assessing Officer has furnished the details of deduction of TDS in respect of M/s. Supreme Roadlines Corporation, Mumbai according to which on the amount of Rs. 34,24,868 TDS of Rs. 35,982 was deducted. However, as against that, the receipts from M/s. Supreme Roadlines Corporation as shown by the assessee was only Rs. 44,000. The explanation of the assessee was that the said amount received from M/s. Supreme Roadlines Corporation had a component of a commission per truck of Rs. 500 only, which was the receipt in the hands of the assessee and the remaining amount was paid by M/s. Supreme Roadlines Corporation to the owners of the truck. So, it was informed that the entire amount as per the TDS certificate was not received by the assessee but it had gone directly to the truc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no outstanding receivable from the tax deductor. In that view of the factual sequence, the action of the Assessing Officer in making the addition is without support of facts of the case and hence to be eliminated and I direct it to be so deleted." 4. With this factual background, we have heard both the sides. From the side of the revenue Learned Sr. Departmental Representative Shri Vimalendu appeared and placed reliance on the order of the Assessing Officer. He has argued that the amount of receipts on which TDS was deducted ought to have been shown in the hands of the assessee, therefore, the accounts have not depicted the correct position of the income which was rightly taxed by the Assessing Officer. On the other hand, from the side of the respondent-assessee Learned Authorised Representative of the assessee Shri S.N. Divatia has drawn our attention from a Certificate issued by M/s. Supreme Roadlines Corporation dated 10-3-2004 which was stated to have been filed before the Assessing Officer to demonstrate that the said concern has actually paid Rs. 500 as a commission per truck, but the TDS was deducted on the whole amount freight of trucks supplied. He has also referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Act. There are few instances which can further elaborate this view. For example, the recipient maintains account on cash basis which may not match with the amounts certified in the TDS Certificate due to the reason that the deductor has maintained the account on mercantile basis. Naturally the deductor will deduct the tax on accrual basis, however, the recipient shall disclose the income on receipt basis. In this situation, there shall always be a mismatch between the amount of receipt as per TDS Certificate and the taxable income offered by the assessee. Due to this reason, the statute has clarified that it is not necessary that the receipts on which tax was deducted as per TDS Certificate should be offered to tax in the same assessment year as per the dates mentioned in the TDS Certificate. This is one of the few examples, however, one more example can also be cited. There can be an instance that the TDS was deducted on the income which may not be subject to tax at all, such as, eligible for deduction under section10A, etc. So the deduction of tax on an income does not ipso facto declare that the amount referred in the TDS certificate is subject to tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS can be granted to the assessee alone. Further, the said TDS relates to the business transactions of the assessee of the year under appeal and the assessee has duly disclosed her income relating to the transactions represented by the said certificates for the year under appeal. There is no material on record to show that the amount of TDS was not deducted from the assessee and it was borne by somebody else. The only dispute is that the assessee instead of showing receipt of full freight and then showing the freight paid to truck operators/owners, has shown only the difference between the aforesaid two amounts as here income as because the payments of freight were directly collected by the truck drivers. In our considered opinion, this is simply a matter of presentation of accounts and merely for not presenting in the accounts, the amount of the gross freight and then freight paid to truck operator/owner separately, the claim of TDS cannot be denied to the assessee..." 5.1 The view expressed by the Respected Co-ordinate Bench also buttress our humble understanding of law, as also supports the reasons assigned hereinabove, hence resultantly we find no force in the ground of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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