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2016 (7) TMI 99 - ITAT DELHI

2016 (7) TMI 99 - ITAT DELHI - TMI - Year of taxability of income - as per regular method of accounting and not as per the year in which TDS has been deducted - Revenue wants to assess the income in the year in which TDS deducted on the income, whereas assessee wants to offer the income to tax according to method of accounting regularly followed by the assessee - Held that:- The issue in dispute is squarely covered by the finding of the Hon’ble third member of the Tribunal in the case of Smt. Va .....

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de in the year under consideration and direct the AO to assess the income in accordance with the regular method of accounting followed by the assessee. Further, the credit of TDS should also be given in the respective assessment year in which the income is offered to tax - Decided partly in favour of assessee - Loan processing fee - revenue or capital expenditure - Held that:- As a loan processing fee has been paid for the purpose of purchase of a car, which is a capital asset and paid or ac .....

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MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant : Sh. Ajay Kumar Sharma, Adv. For The Respondent : Smt. Rishpal Bedi, JCIT (DR) ORDER PER O.P. KANT, A.M.: This appeal of the assessee is directed order dated 27/01/2014 of the learned Commissioner of Income-tax (Appeals)-V, New Delhi for assessment year 2000-10, raising following grounds: 1. That, the assessment order and the Appellate Order are based on conjucture and surmises and against the facts of the case and the law laid down .....

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on. 3. That, the Hon ble CIT (A) has errored in considering the loan processing fees as a capital expenditure instead of revenue expenditure. The Loan processing fees payable to bank is a bank charges for rendering services for granting the loan for car for business purpose. This amount cannot be considered as capital expenditure. This is revenue expenditure. 4. That, the Hon ble CIT (A) has errored in saying that the amount of ₹ 3,90,579 may be reduced from the income for the A.Y. 2010- 1 .....

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he Assessing Officer observed that total receipts as the TDS Certificates was of ₹ 46,23,089/- whereas the assessee declared income of only ₹ 39,36,887/-. The Assessing Officer mentioned in the assessment order that the assessee offered this differential amount of ₹ 4,08,080/- for taxation, however, the assessee disputed this fact and challenged the addition before the learned Commissioner of Income-tax (Appeals). Further, the Assessing Officer held the amount of ₹ 3,520/ .....

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hat the assessee could issue bills, only when the payment was actually received by those companies/firms and during the year under consideration the main dispute was in respect of bills issued to M/s. Modi Industries Ltd. It was submitted that M/s Modi Industries Ltd. booked the payment of commission on provisional basis without receipt of bills issued by the assessee, whereas the assessee while filing the return, had taken the credit of the TDS of ₹ 40,245/- as reflected in form No. 26AS .....

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ady been assessed in next assessment year, same may not be taxed again in the current year. However, the ld. Commissioner of Income-tax (Appeals) held that the AO has rightly taxed the income in the year in which tax credit of TDS has been claimed and directed the assessee to apply for rectification before the AO for exclusion of said income out of assessment year 2010-11, if such income had been taxed twice. The addition of ₹ 3,520/- towards loan processing fee of vehicle held by the Asse .....

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ce (TDS), in respect of which has been claimed in the year under consideration but the income was offered in subsequent year. 4.1 Before us, learned Authorized Representative of the assessee submitted that the assessee was following regular method of raising bills only on receipt of payment by companies/firms from State Transport Corporation and accordingly the income from M/s Modi Industries Ltd. was shown in the assessment year 2010-11 as the bills in respect of the income were only raised in .....

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rial on record. The issue in dispute here is that the Revenue wants to assess the income in the year in which tax was deducted on that income, whereas the assessee wants to tax the income according to the regular method of accounting followed by the assessee. The issue in dispute is squarely covered by the finding of the Hon ble third member of the Tribunal in the case of Smt. Varsha G Salunhke Vs. DCIT (supra). The relevant findings of the said decision are reproduced as under: 6. Sections 198 .....

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ction 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 195, section 196A, section 196B, section 196C and section 196D to be treated as an income received. The purpose of section 198 is not to carve out an exception to section 145 of the Act. Section 199 of the Act has two objectives - one to declare the tax deducted at source as payment of tax on behalf of the person on whose behalf the deduction was made and to give .....

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x. This section 199 does not empower the Assessing Officer to determine the year of assessability of the income itself but it only mandates the year in which the credit is to be given on the basis of the certificate furnished. In other words, when the assessee produces the certificates of TDS, the Assessing Officer is required to verify whether the assessee has offered the income pertained to the certificate before giving credit. If he finds that the income of the certificate is not shown, the A .....

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that according to the method of accounting employed by the assessee the income in respect of the three TDS Certificates, which are mentioned in paragraph 3 above, does not pertain to the assessment year in question, but it pertains to the next assessment year and, in fact, in that year the assessee has offered the same to tax. Therefore, the credit in respect of these three TDS Certificates shall not be given in the assessment year under consideration, but the credit for the same shall be given .....

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claim the credit in respect of these TDS Certificates for which the income has not been returned by her as a result of the method of accounting employed. The credit shall be carried forward and the assessee will get the credit for the present TDS Certificate in the year in which she offers the income to tax on the basis of the method of accounting regularly employed. 4.4 Thus the Tribunal has clearly held that the provisions related to tax deducted at source (TDS) cannot decide the year of taxab .....

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Industries Ltd. of ₹ 3,90,579/- in assessment year 2010-11 in accordance with the regular method of accounting followed by the assessee, however, the credit of tax deducted at source (TDS) corresponding to the income should also be given in the assessment year 2010-11. The credit of TDS in respect of the income from M/s Modi Industries Ltd. allowed in the year under consideration has to be reduced/withdrawn accordingly. We also set aside the direction of the learned Commissioner of Income .....

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