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Chandra Shekhar Aggarwal Versus ACIT, Circle-61 (1) , New Delhi

2017 (11) TMI 514 - ITAT DELHI

Non grant of Credit of TDS - following cash system of accounting - TDS has been claimed this year but income for the same has not been taken in gross receipts - Held that:- The assessee would be entitled to credit of the entire TDS offered as income by the assessee in his return of income. The tax credit was allowed to the assessee of ₹ 94,60,649/- instead of ₹ 97,36,440/-. In other words, the issue remains relating to non grant of credit of ₹ 2,75,791/- i.e. the difference of .....

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/2016 passed by CIT(A)-20, New Delhi for the Assessment Year 2012-13. 2. The grounds of appeal are as under:- 1. That the Ld.CIT(A) 2, New Delhi has grossly erred both in law and on facts in not directing the grant of credit of TDS of ₹ 7,16,040/- in clear disregard of the order of Hon ble Income Tax Appellate Tribunal in the case of the appellant for Assessment Year 2011-12, despite specific ground and submission made by the appellant. 1.1. That the findings of the Ld.CIT(A), that the A.O .....

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ble Tribunal in the case of the appellant for Assessment Year 2011-12 and held specifically held that action of Ld. Assessing Officer was highly arbitrary, unjustified and not in accordance with law and directed thus for credit of TDS of ₹ 7,95,600/- as claimed. 2. That the Ld.CIT(A) has also grossly erred both in law and on facts in not holding that the ld. Assessing Officer had erred in restricting credit of TDS of ₹ 43,31,947/- in TNS 150 despite the fact the assessee had furnish .....

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cancelled and the Ld. Assessing Officer be directed to give further credit of ₹ 7,16,040/- and no interest be directed to be charged from the assessee u/s 234B and 234C of the Act. It is further prayed that since the Assessing Officer has not yet given credit of ₹ 4,40,249/- which represented the tax deducted at source of which credit had not been given for the Assessment Year 2011-12 he be directed give credit on the basis of his own findings for that Assessment Year and the appell .....

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ssued from time to time. In response to the notice, Sh. Puneet Singla, CA of the assessee attended from time to time and filed the necessary details information documents etc as required. Books of accounts and vouchers were produced during the course of assessment proceedings which were examined on test check basis. During the course of assessment proceedings, assessee was asked to submit the TDS reconciliation of 26AS viz-a-viz the professional income shown and TDS claimed in return. The assess .....

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s not shown for Assessment Year 2012-13. The same was disallowed as per Rule 37BA read along with Section 199 of the I.T. Act, 1961 by the Assessing Officer. The Assessing Officer observed that from the perusal of Rule 37BA of the I.T Rules, 1962, it is clear that TDS credit shall be given for the assessment year for which such income is assessable. Meaning thereby TDS credit shall be allowed only when its corresponding income has been taken for taxation. Thus, the Assessing Officer held that th .....

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balance will be allowable in the year in which the corresponding professional income would be assessable. After scrutinizing the relevant documents on test check basis and discussing the case with AR of the assessee, income of the assessee was assessed at ₹ 9,88,74,420/- u/s 143 (3) of the IT Act, 1961 by the Assessing Officer and Interest was charged u/s 234B and 234C accordingly. 4. Being aggrieved by the order of the Assessing Officer. The assessee filed appeal before the CIT(A). The CI .....

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ons of Section 198 of the Act. The CIT(A) did not find any infirmity in declaration of ₹ 7,95,600/- which the amount of TDS which is in the line with the provisions of Section 198 of the Act as the assessee is following cash system of account. The A.O thus, directed the Assessing Officer to give credit of TDS strictly as per the provisions of Section 199 to be read with Rule 37BA of the Income Tax Rules 1962. 5. The Ld. AR submitted that in assessee s own case for the Assessment Year 2011- .....

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provided in section 199(3) of the Act. Rule 37BA(3)(i) of the Act provides that credit for tax deducted at source and credited to the account of Central Government shall be given for the assessment year for ITA No.6185/Del./2013 which, such income is assessable. Thus, if the said rule is read, it is clear that the assessee is entitled to get credit of the tax deducted at source once such income is included in his income. The admitted facts of the case of the appellant is that the tax deducted a .....

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dit of the account of the assessee and issued a certificate of TDS to the assessee and thus, it was submitted that an amount of ₹ 10/- was since deducted in respect of the assessee, the said sum is income of the assessee which is assessable to tax. It was submitted that once an income is assessable to tax, the assessee is eligible for credit despite the fact that remaining amount would be taxable in the succeeding years. We are in an agreement with the above submission that the TDS deducte .....

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be allowed across those years in the same proportion in which the income is assessable to tax. In our considered opinion, this rule is only applicable where entire compensation is received in advance but the same is not assessable to tax in that year but is assessable in a number of years. However, such rule has no applicability, where assessee follows cash system of accounting. This can be supported from the illustration that suppose as assessee who is following cash system of accounting raise .....

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rcumstances, ₹ 9/- which was deducted as TDS by the deductor would never be available for credit to the assessee though the said sums stand duly deposited to the account of the Central Government. Rule. 37BA(3) of the Act cannot be interpreted so as to say that TDS deducted at ITA No.6185/Del./2013 source and deposited to the account of the Central Government is though income of the assessee but is not eligible for credit of tax in the year when such TDS was offered as income. This view is .....

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dit of deduction made in accordance with the relevant provisions of this chapter and paid to the Central Government, shall be given for the amount so deducted on the production of the certificate furnished u/s 203 for the assessment made under this Act for the assessment year for which such income is assessable. But in the amended provisions the words for the assessment year for which such income is assessable has been omitted. Meaning thereby, that the legislature was quite conscious about the .....

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Therefore, as per the amended provisions, once the TDS was deducted, a credit of the same to be given to the assessees, irrespective of the year to which it relates. The preamended and the amended provisions of section 199 are extracted hereunder: Section 199: Credit for tax deducted - (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction wa .....

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of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub- section (2) and also the assessment year for which such credit may be given. Section 199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made, or of the o .....

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e find that the Visakhapatnam Bench in the case of Peddu Srinivasa Rao (supra) has held as under: ....... The ld. DR could not cite any contrary decision or any other good reason for which the aforesaid decision of the Co-ordinate Bench of the Tribunal should not be followed by us. Respectfully following the aforesaid order of the Tribunal, we set aside the orders of the lower authorities and direct the AO to allow credit for the TDS to the assessee. Thus, the ground of appeal of the assessee is .....

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