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TMI Blog2020 (10) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... principles of natural justice, contrary to facts, unjustified, arbitrary, erroneous and bad, both in the eye of law and on facts and legally untenable. b. That on the facts and in the circumstances of the case, the Learned lower authorities have misconstrued/mis-appreciated the facts and law and the denial of tax credit for TDS of Rs. 12,88,214/- i.e.(Rs. 16,93,054 - Rs. 4,04,840 under Rule 37BA of the I.T.Rules,1962 is contrary to facts, unjustified, arbitrary, erroneous and bad, both in the eye of law and on facts and legally not tenable. c. That without prejudice to Grounds 2(a) & (b) above, the learned CIT(Appeals) has mis-appreciated/ misinterpreted the provisions of Rule 37BA of the I.T.Rules,1962 and not following the ITAT order is unjustified, arbitrary, erroneous and bad. both in the eye of law and on facts." 3. I have heard the rival submissions and perused the relevant materials placed on the record of the Tribunal. 4. The relevant facts of the case are that the assessee is a distributor of Reliance Telecom Ltd (RTL) and receives commission for goods sold on behalf of RTL. During the course of assessment proceedings, the Assessing Officer noticed that as per Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . of the assessee did not submit any details of recipients (retailers) of such direct credits to the tune of Rs. 1,28,82,141/-, therefore, the AO as well as ld CIT(A) was right in denying credit of TDS related to this amount of Rs. 12,88,214/-. Ld D.R., in all fairness, also submitted that if it is found just, proper and necessary, then the department has no serious objection if the issue is restored to the file of the AO for limited purposes to examine and verify as to whether respective recipients (retailers) of such direct credits have claimed TDS in their respective returns or not. 7. Placing rejoinder to above, ld A.R. placed reliance on the judgment of Hon'ble Delhi High Court in the case of CIT vs Relecom, 286 CTR 102 (Delhi) and submitted that when the revenue having assessed income in respect of retailers (recipients) of such TDS claim and these recipients have not claimed any credit, then such TDS claimed cannot be denied to the assessee on a technical ground that income respect of TDS claim was not that of the assessee. Ld A.R. further placing reliance on the decision of ITAT Delhi in the case of Sunita Devi vs ACIT, 2015 (9) TMI 64-ITAT Delhi submitted that the issue w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g credit of TDS in the case of deductee and other persons as well as for multiple assessment years, which reads as under :- "Credit for tax deducted at source for the purposes of section 199. 37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorized by such authority. (2) (i) If the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for tax deducted at source shall be given to the other person in cases where- (a) the income of the deductee is included in the total income of another person under the provisions of section 60, section 61, section 64, section93 or section 94; (b) the income of a deductee being an association of persons or a trust is assessable in the hands of members of the association of persons, or in the hands of trustees, as the case may be; (c) the income from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in hand, as the income of the assessee is not falling under any of the clauses of sub Rule (2) and issue of credit in multiple years is also not involved in the case in hand. So, only sub section (1) of section 199 of the Act, and sub Rule (1) and (4) of the Rule 37BA of the Rules are related to the case of the assessee. The first limb of the said subsection refers to the tax deducted and paid to the Central Government. The second limb of the sub section refers to allowing of credit of the tax so deducted and paid to central government, in the hands the person from whose income, the tax has been deducted. So, a plain and literal interpretation of sub section (1) of section 199 leads to result that the credit of the tax deducted has to be given in the hands of the deductee i.e the person from whose income the deduction was made. Thus, said sub section nowhere says that credit of TDS should be restricted only to the amount of income or receipt offered in the return of Income or in the Profit and Loss Account. Further, sub rule (1) of rule 37BA of the Rules also emphasize to allow the credit in the hands of deductor on the basis of the information related to deduction of tax furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctcr. The constitution has not mandated the department to swallow the rightful money of the tax payer without any rule of law. Further, the departmental representative submitted that there is possibility that Shri Kapil Ahluwalia might have taken credit of the balance ? 12, 23,608/- and therefore if credit of this amount is allowed to the assessee, it will amount to allowing of double credit of the same account and it will be unjust enrichment in the hands of assessee. The Id. AR however, countered the argument of the DR and stated that the TDS Certificate has been issued to the assessee only and as per data base of Income-tax department, the TDS is reflecting against the assessee only, therefore allowing credit in the hands of Shri Kapil Ahluwalia was not possible. He further submitted that Sh. Kapil Ahluwalia is liable to pay tax on the income transferred to him, and therefore, not allowing credit of Rs. 12,23,608/- to the assessee and retaining the amount by the Income-tax department without giving adjustment to either assessee or Sh. Kapil Ahluwalia amounts to unjust enrichment in the hands of the department. We agree with the above contention of the Id. Authorised Representati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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