TMI Blog2011 (3) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... ri S.K. Yadav, Judicial Member:- This appeal by the revenue is preferred against the order of the CIT(A) on a solitary ground that CIT(A) has erred in holding that assessee is entitled to the credit of TDS made in respect of mobilization advance received by him though the mobilization advance was not adjusted against the work bills certificate during the year and did not form part of the gross contract receipts credited to the P L account. 2. We have heard the rival submissions and carefully perused the orders of the authorities below and documents placed on record. The facts borne out from the record are that during the course of assessment proceedings, it was noticed by the A.O. that the gross receipts as per TDS certificate was of Rs.17,01,04,999/- and it is inclusive of sub-contract receipt of Rs.8,08,59,383/- received from M/s. Gammon India Limited. Assessee was asked to reconcile the gross work receipts in respect of sub-contract receipts received from M/s. Gammon India Limited and the reconciliation statement was filed. The assessee has stated that the gross receipts from M/s. Gammon India Limited was Rs.8,08,59,383/- and the balance amount of Rs.11,88,75,000/- as per TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificates relate to. He has also placed reliance upon certain decisions before the A.O. But the A.O. was not convinced with it and he disallowed the credit of the tax deducted at source on the mobilization advance. 4. The assessee preferred an appeal before the CIT(A) with the submission that mobilization advance was granted to the assessee in order to enable it to deploy machinery and man power in sufficient quantity at the work site, awarded to the assessee. It was further contended that since the mobilization advance is not in the nature of income, no TDS can be deducted but it was however, deducted by M/s. Gammon India Limited. Therefore, the credit of the same is to be allowed to the assessee. The contentions of the assesses were examined by the CIT(A) and following the order of the Tribunal, Mumbai Bench in the case of Toyo Engineering India Limited, 5 SOT 616 directed the A.O. to allow the credit of TDS in the year under consideration. 5. The revenue preferred an appeal before the Tribunal with the submissions that Tribunal has taken a contrary view in similar type of situation. Therefore, the CIT is not justified in adopting the view that the credit of TDS can be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Having heard the rival submissions and from a careful perusal of the orders of the authorities below and documents placed on record in the light of all relevant provisions of the Act, we find that undisputedly, the assessee has received the mobilization amount which is to be adjusted against subcontract bills raised in subsequent years. It is also evident from the record that on this mobilization amount, assessee was required to pay the interest. Therefore, once the entire mobilization amount is not an income of the assessee, TDS should not have been deducted by the payer. But in any case, the TDS was deducted on this payment of mobilization amount though it was not an income in the hands of the assessee on its receipt. But subsequently, whenever it is to be adjusted in the sub-contract bills to be raised in the subsequent years, it would gradually partake the character of the income of the assessees. Now the question arise, once the TDS was deducted on the receipt, how the credit of the same is to be allowed to the assessees? 8. We have carefully perused the provisions of section 199 of the Act and according to the pre-amended provisions of section 199, the credit of deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person from whose income the deduction was made, or of the owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be. (2) Any sum referred to in sub-section (1A) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. 9. In the light of these amendments, we have also examined the judgement of this Hyderabad Tribunal in the case of Progressive Constructions Limited Vs. JCIT ITA 482 and 557/Hyd/2001 and the order of the Tribunal of Chennai Bench in the case of Supreme Renewable Energy Limited Vs. ITO 32 DTR 140 and Toyo Engineering Limited 5 SOT 616 in which the Tribunal has taken a consistent view that the credit of TDS should be given in the year of receipt. The facts of the case of M/s. Progressive Constructions Ltd. (supra) and Toyo Engineering India Limited (supra) are almost similar to that of the present case. In the case of Supreme Renewable Energy Limited (supra), the Tribunal has held that when the interest income is incidental to the acquisition and installation of an asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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