TMI Blog2018 (1) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... AL MEMBER For The Appellant : Shri Surendra Modiani, A.R. For The Respondent : Shri Mudit Nagpal, Sr. D.R ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER : This appeal of the assessee relating to assessment year 2011-12 is directed against the order of Learned Commissioner of Income Tax (Appeals)-II, Baroda dated 30.06.2014 which is arising out of order u/s.143(3) of the Income Tax Act, 1961 dated 23.01.2014 framed by Addl. Commissioner of Income Tax, Range - 2, Baroda, vide appeal no.CAB/II-350/13-14. 2. Assessee has taken following Grounds of appeal: 1) The assessee is engaged in the business as land survey Contractor. The assessee filed its return of income on 16.09.2011 and the return was processed u/s 143(1). 2) The case was selected for scrutiny and notices were issued u/s.143(2) and 142(1). Order was passes u/s.143(3) dated 18.12.2013 assessing the income as ₹ 62,95,030/- after making certain additions of ₹ 2,73,000/-. 3) The Assessing officer has not allowed TDS claim of ₹ 12,07,747/- on account of the fact that corresponding income was not offered for taxation in the relevant assessment year of such claim. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in a particular assessment year. 6.1 In support of its contention, assessee cited an order of Delhi Bench in the matter of Chander Shekhar Aggarwal vs. Assistant Commissioner of Income-tax, Circle 37(1), New Delhi, [2016] 67 taxmann.com 62 (Delhi Trib.). Operative para of the same is reproduced as under: 8. We have carefully considered the original submission and perused the material on record. It is noticed that in the instant case assessee as adopted cash method of accounting. He furnished his return of income claiming credit of TDS of ₹ 79,91,290/- which was further revised to ₹ 80,16,290/-. The AO restricted the credit of ₹ 71,20,267/- in the intimation u/s 143(1) of the Act. The CIT(A) has upheld the restriction inter-alia on the ground that credit of TDS is to be allowed in terms of Rule 37BA(2) of the Rules and as such the credit would be allowable on pro rata basis in the year in which the certificate is issued and also in future where balance of such income is found to be assessable as per the mandate of section 199 of the Act. She has held that any amount which has not been assessed in any year but referred in the TDS certificate can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).] ( ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person. ( iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody. ( 3)(i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. ( ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. ( 4) Credit for tax deducted at source and paid to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es that where tax has been deducted at source paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall 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 raises an invoice of ₹ 100/- in respect of which deductor deducts TDS of ₹ 10/- and deposits to the account of the Central Government. Accordingly, the assessee would offer an income of ₹ 10/- and claim TDS of ₹ 10/-. However in the opinion of the revenue, the assessee would not be entitled to credit of the entire TDS of ₹ 10/- but would be entitled to proportionate credit only. Now let us assume that ₹ 90/- is never paid to the assessee by the deductor. In such circumstances, ₹ 9/- which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on behalf of the person from whose income the deduction was made, or of the owner of the security, or depositor or owner of property or of unitholder or of the shareholder, as the case may be, and credit shall be given to him for the amount so deducted on the production of the certificate furnished under section 203 in the assessment made under this Act for the assessment year for which such income is assessable: (3) The Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions 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 owner of the security, or of the depositor or of the owner of property or of the unit-holder, or of the shareholder, as the case may be. (2) Any sum referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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