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AMOUNT DEDUCTED AT SOURCE NOT CAPABLE OF BEING ADJUSTED OR COUNTED TOWARDS TAX PAYABLE

Income Tax - Direct Tax Code - DTC - By: - Mr. M. GOVINDARAJAN - Dated:- 8-5-2015 - The assessee has option to file returns by adopting either the cash system or the mercantile system. Under the cash system, the assessee would be under an obligation to pay tax only on such of the amount which has been actually received by him. In the mercantile system, mere entitlement to receive would bring about the obligation to pay tax. The assessee can choose one of them or both of them for different parts, .....

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y be referred to as the second company . The second company is paying interest to the appellant regularly and deducted tax at source and remitted the same to the credit of the Government. The appellant also paid the difference of tax for the said interest while filing the return. The first company was just showing the accumulated interest in its account books without making any payment. However the first company deposited the tax as deducted at source for the interest payable to the appellant. T .....

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nt. The Revenue treated the interest payable by the first company on transfer basis as income and levied tax. The same result ensued for various financial years. The appellant, aggrieved by this order, filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) dismissed the appeal filed him. The Tribunal also dismissed the appeal filed by the appellant against the order of Commissioner (Appeals). As such he approached the High Court for redressal. He put forth the following ar .....

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licant was entitled to claim the benefit thereof. The Department contended the following: Though it is permissible for an assessee to adopt dual method for the same returns the appellant cannot claim the benefit of TDS in the entirety and at the same time, refuse to pay the tax on the corresponding interest; The appellant acquired a right to receive interest from the first company once it was shown in the account books of that organization; It is sufficient to levy tax upon the appellant, par .....

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erest and issued certificates for TDS. The appellant wanted to use the certificate on its entirety i.e., the amount reflected in the TDS certificate was being shown as already paid. This would have devastating effect. The amount covered by the certificates would take of the interest payable on other income of the appellant. All the Authorities from the Adjudicating authority to the Tribunal did not approval the method adopted by the appellant. The High Court held that the appellant cannot be per .....

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