TMI Blog2019 (12) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly partly allowed. Addition of expenses pertaining to the house property, income from which has been offered under the head income from house property - deduction for expenses incurred on said property already stand covered by the 30% deduction under the income from house property - HELD THAT:- Assessee failed to substantiate that the expenses in dispute pertains to portion of the property, income from which is not included under the head income from house property . The claim of the assessee cannot be allowed in absence of substantiation with documentary evidences. We do not find any error in the order of the learned CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground of the assessee related to disallowance are accordingly dismissed. - ITA No.6144/Del/2016 - - - Dated:- 10-12-2019 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For the Appellant : Shri B.L. Gupta, AR For the Respondent : Shri Shailesh Kumar, Sr.DR ORDER PER O.P. KANT, AM: This appeal by the assessee is directed against order dated 20/10/2016 passed by the Ld. Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. counsel of the assessee filed a paper-book containing pages 1 to 77 and reiterated the submissions made before the lower authorities. The Ld. counsel submitted that the deduction on account of tax deducted at source has to be allowed in the year of deduction irrespective of income has been declared in the next year. He submitted that similar issue was involved in the case of Sunita Devi decided by the Tribunal in ITA No.4473/Del/2012 for assessment year 2009-10. According to him, TDS should be allowed on the basis of form No. 26AS . 3.1 He further submitted that alternatively, credit of the TDS of 5,85,000/- should be allowed in the subsequent year. Regarding the expenses disallowed on fuel, power and maintenance, the Ld. counsel submitted that the assessee is engaged in real estate business and derives rental income from part of the property and other part was used for business purposes. The Ld. counsel contested that those expenses were pertaining to the part of the building, income from which was not offered under the income from house property and that part of the building was used for business purposes. He submitted that in assessment year 2014- 15, the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share holder, as the case may be. Further, as per provisions of Rule 37BA(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. a. From the above provisions of Income Tax Law, it is evident that claim of TDS can be passed on to the assessee only if the corresponding income on which TDS has been deducted, offered for taxation by the assessee. However, in the instant case, though appellant has claimed the benefit of TDS but corresponding advance rent has not been included in the taxable income for the year under consideration. In this regard, I place reliance on the following judicial pronouncements of the Hon'ble Andhra Pradesh High Court on the similar facts and circumstances, in the case reported as Sri Y. Rathiesh vs The Commissioner Of Income Tax on 6 August. 2014, the ratio of which is that, no TDS credit can be claimed in returns if the corresponding income, on which TDS was deducted, not shown in returns. Further such TDS amount shall be treated as deemed to be income received by invoking section 198 of the Income Tax Act, 1961: Case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and even while holding the same as permissible, the authorities under the Act have adopted the principles underlying the mercantile system for the entire returns. It is pleaded that when the 1st company did not pay the interest at all, the appellant ought not to have been levied tax on such amount. She has also urged that once TDS is deducted even while withholding the payment of the corresponding amount, the appellant was entitled to claim the benefit thereof. Sri S.R. Ashok, learned Senior Counsel for the Income Tax Department submits that though it is permissible for an assessee to adopt dual method for the same returns, the appellant cannot claim the benefit of TDS in its entirety and at the same lime, refuse to pay tax on the corresponding interest. Learned Senior Counsel submits that the appellant acquired a right to receive interest from the ist company once it was shown in the account books of that organization; and that is sufficient to levy tax upon the appellant; particularly when he is taking full advantage of the amount recovered as TDS. The assessee has option to file returns by adopting the cash system or mercantile system. In a given case, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s affected, was not reflected in the returns at all. All the authorities under the Act i.e., the assessing officer, the Commissioner and the Tribunal did not approve the method adopted by the appellant. The appellant cannot be permitted to blow hot and cold at one and the same time. If no TDS was affected and interest was not paid, he would not have been under an obligation to show the amount of interest in his returns, much less to pay lux thereon. However, once TDS is affected, he cannot be permitted to use the certificate to cover other amounts even while refusing to show the amount of interest in his returns. The steps taken by the authorities in this behalf cannot be treated as applying the parameters for mercantile system to a component of the returns filed under the cash system. The effect of the order passed by the assessing officer as upheld by the Commissioner and the Tribunal is only that the appellant must desist from having the best of both the systems and discarding the one, which is disadvantageous to him. Once he intends to treat the amount deducted as TDS as a component of tax paid, the corresponding to the TDS must form part of the returns and assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS has been claimed by it. d. Further, the ratio of judicial pronouncement in the case reported as Varsha G. Salunke vs. Deputy CIT (2006) 98 ITD 147 (Mum.) (TM) is that, if AO finds that income of the TDS certificate is not shown, the AO has only not to give credit for TDS in that assessment year and has to defer the credit being given to the year in which the income is to be assessed. From the above judicial pronouncement, it is clearly established that for claiming benefit of TDS, assessee is duty bound to offer the corresponding income for taxation and AO can only allow the benefit of TDS in case the corresponding income is found to be offered for taxation. 4.1.1 Thus, from the factual matrix of the case, ratio of judicial pronouncements discussed above, and clear cut provisions of section 198 and 199 r.w.r. 37BA(3)(i) of the Act. reproduced above, it is evident that appellant has failed to comply with these provisions of law. Therefore, it is held that AO has rightly disallowed the credit of TDS of ₹ 5,85,000/- as appellant claimed the benefit of TDS to the extent above but corresponding advance rent has not been offered for taxation. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions of the Ld. AR are found to be devoid of any merits as simply saying that appellant has incurred the above expenses in relation to business cannot be accepted since he has failed to establish the hint of any other business activity apart from the rental income. In the P L A/c, appellant has shown revenue from operation which is nothing but rental receipts, which has been claimed by the appellant as its income from house property while filing the return and income was shown under this head. As per provisions of the Act, appellant is eligible to claim deduction u/s 24 of the Act, which has been claimed and allowed to the appellant. From the modus operandi adopted by the appellant company, it can be held that it is trying to take double benefit of deduction u/s 24 and claiming deduction on the pretext of provisions of Section 37(1) of the Act on a single head of income Simply claiming that company is engaged in business cannot be accepted too as even during the appellant proceedings and before the AO, appellant has failed to explain the nature of business other than the real estate development. Hence, the submissions of the Ld. AR are not found to get acceptable and I am incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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