TMI Blog2016 (9) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... he year, which obviously did not relate to the year in question. A careful perusal of the provision indicates that the credit for TDS can be allowed only for the assessment year for which the corresponding income is offered for taxation. There can be no question of allowing credit for the TDS in the assessment of a year for which the matching income is not offered for taxation. In other words, both the income and credit for TDS go hand in hand and cannot be disassociated from each other. As the amount of interest on which tax has been withheld is not chargeable to tax in the instant year, the assessee cannot equally be allowed credit for TDS on such interest income against other income. When confronted with this position, the ld. AR contended that since the AO allowed credit for such TDS, the Tribunal cannot disallow the same. We are not convinced with the submission. The patent reason for not disallowing credit for such TDS by the AO is that he charged to tax the entire interest income in the year in question and impliedly following the prescription of section 199, allowed the credit for TDS. As the interest income is held to be not chargeable to tax in the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding that the entire amount of the interest of ₹ 13,91,426/- pertains to the year under consideration ignoring the material facts available on record that this interest pertains to the period from 2th September, 1985 to 15th February, 2002. ii) That in this regard the learned CIT(A) has erred in wrongly drawing inference on the basis of the TDS certificate issued by the Acquisition Officer. 8. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the appellant that taxing the entire interest of ₹ 13,91 ,426/- will tantamount to double taxation of the same income. 9. On the facts and circumstances of the case, the order passed by the learned CIT(A) is perverse and liable to be quashed. 2. Ground No.1 is general in nature hence, do not require adjudication. 2.1 Ground No.2(i) and 3 have been raised challenging he reassessment proceedings initiated by Ld. A.O. and all the other grounds relate to the issue of interest received during the financial relevant o the assessment year under consideration being tax on spread over basis and not on receipt basis. Assessee has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer initiated proceedings u/s 148, alleging that interest on enhanced compensation amounting to ₹ 13,91,427/- received by the assessee from Land Acquisition Officer in November, 2003 has escaped assessment. 2.4 The assessee contended before the Ld. A.O. that he had already revised its return of income for the earlier years by spreading over the interest as per the judgment of Hon'ble Punjab Haryana High Court in the case of Tuhiram Vs Land Acquisition Collector and others reported in 199 ITR 490 (being the Jurisdictional High Court in case of the assessee). 2.5 The reason for the issuance of notice u/s 148 of the I.T. Act, 1961 as recorded by the Assessing Officer is as under: Reasons for Issue of Notice u/s 148 of the Income tax Act. 1961: The assessee filed return of income on 30/9/2004, declaring an income of ₹ 4,20,760/-. The assessee derived income from9 business, house property and interest income. The return was processed u/s 143(1) dated 17/6/2005 and a refund of ₹ 1,27,953/- was issued on 4/7/2005. Later on, on examination of the return, it is seen that during the year under consideration, the assessee has received i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of interest u/s 34 of the Land Acquisition Act 1894. Ld. A.R. submitted that the assessee revised its return for earlier years when the payment was received. He submitted that the enhanced interest received does not pertain to the financial year relevant to Assessment Year under consideration. It pertained to the period from effective date of compensation to the actual date of decision of the Court. He referred to and relied upon the decision of Hon'ble Jurisdictional High Court in the case of Tuhiram Vs Land Acquisition Collector and others (supra), wherein the Hon'ble Punjab Haryana High Court had mandatorily required the spread over of income on year to year basis and to pay the tax accordingly. In these circumstances, it has been submitted by the Ld. A.R. that the assessee could not file his return reflecting the total interest income in the year of its receipt as it actually relates to various previous Assessment Years. 5.2 Ld. A.R. also submitted that the law relating to TDS, does not restrict the assessee for claiming the tax deduced on such interest received during the financial year relevant to the Assessment Year under consideration even though the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and finally the Hon'ble Court in this case concluded as under:- It is not necessary for reopening' under section 147 that assessment should have been finalized under section 143(3) once the assessment for the relevant year was admittedly completed vide an intimation under section 143(1) the notice under section 147/148 issued to the petitioner was not vitiated merely for the reason that notice under section 143(2) had not been issued to it. 4.04 The Hon'ble Punjab Haryana High Court further considered this issue in the case of Ramesh Chander Singla Vs. CIT(A) 2 ANR (2011) 330 ITR 28S (P H) . The catch note from that decision is reproduced be1ow:- The assessee, a Development Officer of the LIC claimed deduction on incentive bonus and additional conveyance allowance received by him. The return of the assessee was processed under section 143(1) of the Income Tax Act, 1961, thereby, benefit of deduction was taken by the assessee. Later, the Assessing Officer held that the assessee was to be governed by the head of Salary and that he could get deduction by treating income under the head of 'Business Income and accordingly proceedings for reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO is held as per law and grounds' no. 1 of appeal are as such dismissed. 6.3 We do not find any infirmity in the findings of Ld. CIT(A). Respectfully following the ratio laid down in the decisions above, we dismiss these grounds raised by assessee. 6.4 The issue raised under Ground No.4 to 8 argued before us is regarding taxability of a sum of ₹ 13,91,472/- received by the assessee in the year relevant to the assessment year under consideration, which admittedly pertains to more than fifteen earlier years as discussed above. The assessee revised his returns for the three years and offered the amount of interest relating to those years to tax. The remaining amount relating to the earlier years was not offered as the time limit for revising the returns or rectifying the assessments had already expired. The AO took a stand that the entire amount is chargeable to tax in the year of receipt. The Hon ble Supreme Court in Rama Bai VS CIT (1990) 181 ITR 400 (SC) has held that Interest on enhanced compensation awarded under the Land Acquisition Act accrues year after year and not on the date of granting enhanced compensation. In view of this articulation of law by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the matching income is not offered for taxation. In other words, both the income and credit for TDS go hand in hand and cannot be disassociated from each other. As the amount of interest on which tax has been withheld is not chargeable to tax in the instant year, the assessee cannot equally be allowed credit for TDS on such interest income against other income. When confronted with this position, the ld. AR contended that since the AO allowed credit for such TDS, the Tribunal cannot disallow the same. 6.8. We are not convinced with the submission. The patent reason for not disallowing credit for such TDS by the AO is that he charged to tax the entire interest income in the year in question and impliedly following the prescription of section 199, allowed the credit for TDS. As the interest income is held to be not chargeable to tax in the year under consideration, the assessee cannot be allowed to avail credit for TDS on such interest income against tax on his other income. To sum up, the interest income of Rs.Rs.13,91,472/ - is not chargeable to tax and further no credit for TDS of Rs.l,41,825 on such interest can be allowed in the instant year. 7. In the result, appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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