TMI Blog2015 (9) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... A.M. This appeal has been preferred by the assessee against the order dated 11th May, 2012 of the Commissioner of Income Tax (Appeals)- XXVII, New Delhi for assessment year 2009-10. 2. The grounds of appeal raised by the assessee are as under :- 1. The ld. CIT(A) erred, on facts and in law, in not granting credit of tax deducted at source u/s 199 of the I. T. Act, 1961. 2. Without prejudice to ground no. 1, the CIT(A) was not justified in not issuing direction to allow proportionate credit against the tax liability of Sh. Kapil Ahluwalia who is the recipient of balance 50% of income. 3. The appellant craves to add, or amend the ground of appeals if required and necessary. 3. The facts in brief are that the assessee is an individual, engaged in retail business and earned income from franchisee / commission from M/s. Arvind mills. The assessee filed return of income on 29.9.2009 declaring total income of ₹ 1,19,89,080/-. The scrutiny assessment of the case was completed on 23rd December, 2011 u/s 143(3) of the Income Tax, 1961 (in short Act ). 4. During the year under consideration, the assessee received commission of ₹ 2,61,18,048/- from M/s. Arv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Rules was not applicable in the case of the assessee. Further, in his written submission, the AR pleaded that credit for whole amount of TDS is allowable even if the amount on which tax was deducted is not chargeable in the hands of the assessee. Further, the ld. AR submitted that the provisions of section 199 of the Act and Rules made thereunder are enabling provisions only and the AO has no power to disallow the credit which is available to the deductee on the basis of the TDS certificates. Further, he also submitted that the provisions of section 199 of the Act and rules made thereunder cannot be interpreted in such a manner so as to permit the Income Tax Department to retain the amount of TDS as such course of action would be in violation of the provisions of Article 265 of the Constitution of India. The ld. AR also submitted that once the tax has been deducted at source and paid to the credit of Central Government, a right is created in favour of the deductee which cannot be taken away or abridged or diluted in any manner by any of action of the Tax Authority. The ld. AR further relied on the following decisions :- 1. Arvind Murjani Brands (P) Ltd. vs. ITO, 137ITD 173 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorized by such authority. (2) (i) If the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for tax deducted at source shall be given to the other person in cases where--- (a) the income of the deductee is included in the total income of another person under the provisions of section 60, section 61, section 64, section93 or section94; (b) the income of a deductee being an association of persons or a trust is assessable in the hands of members of the association of persons, or in the hands of trustees, as the case may be; (c) the income from an asset held in the name of a deductee, being a partner of a firm or a karta of a Hindu undivided family, is assessable as the income of the firm, or Hindu undivided family, as the case may be; (d) the income from a property, deposit, security, unit or share held in the name of a deductee is owned jointly by the deductee and other persons and the income is assessable in their hands in the same proportion as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted and paid to the Central Government. The second limb of the sub section refers to allowing of credit of the tax so deducted and paid to central government, in the hands the person from whose income, the tax has been deducted. So, a plain and literal interpretation of sub section (1) of section 199 leads to result that the credit of the tax deducted has to be given in the hands of the deductee i. E. the person from whose income the deduction was made. Thus, said sub section nowhere says that credit of TDS should be restricted only to the amount of income or receipt offered in the return of Income or in the Profit and Loss Account. Further, sub rule (1) of rule 37BA of the Rules also emphasize to allow the credit in the hands of deductor on the basis of the information related to deduction of tax furnished by the deductor. With effect from 1.4.2008, the section 199 of the Act has undergone a change and the requirement of TDS certificate for tax credit has been dispensed with and now the credit is being allowed as per Rule 37BA(4) of the Rules on the basis of information available in the Income Tax Statement (ITS) of the assessee on the data base of Income Tax Department or on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to allowing of double credit of the same account and it will be unjust enrichment in the hands of assessee. The ld. AR however, countered the argument of the DR and stated that the TDS Certificate has been issued to the assessee only and as per data base of Income-tax department, the TDS is reflecting against the assessee only, therefore allowing credit in the hands of Shri Kapil Ahluwalia was not possible. He further submitted that Sh. Kapil Ahluwalia is liable to pay tax on the income transferred to him, and therefore, not allowing credit of ₹ 12,23,608/- to the assessee and retaining the amount by the Income-tax department without giving adjustment to either assessee or Sh. Kapil Ahluwalia amounts to unjust enrichment in the hands of the department. We agree with the above contention of the ld. Authorised Representative. We are of the view that neither party should be made unjust enriched at the cost of the other. We hold that the credit of the ₹ 12,23,608/- is allowable in the hands of the assessee, in view of the clear provisions of sub section(1) of section 199 of the Act and Rules made thereunder. However, we direct the assessing officer to verify whether any ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
