TMI Blog2023 (2) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax as contract was not fully executed in relevant year. As decided in SUPREME RENEWABLE ENERGY LIMITED. VERSUS INCOME TAX OFFICER. [ 2008 (8) TMI 432 - ITAT MADRAS-C] assessee becomes entitled to credit of TDS even if he has not directly offered the relevant income for tax on the basis that it is not liable to tax. In the case of Sadbhav Engineering Ltd. [ 2014 (1) TMI 233 - ITAT AHMEDABAD] held that once the TDS deducted, credit of the same to be given to assessees, irrespective of year to which it relates. In the case of NCC Maytas JV [ 2013 (9) TMI 1294 - ITAT HYDERABAD] ITAT held that a part of TDS cannot be denied on the ground that the corresponding turnover has not been shown in the A.Y. in which credit is being claimed, if income relating to such TDS has already been offered for taxation in an earlier assessment year. Accordingly, in view of the above observations, we find no infirmity in the order of Ld. CIT(A) who has allowed the appeal of the assessee after appreciating all relevant factors. In the result, the appeal of the Department is dismissed. - ITA Nos. 470 & 525/Ahd/2020 - - - Dated:- 24-2-2023 - Shri Waseem Ahmed, Accountant Member And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-2019, wherein it was stated that there is mismatch in credit of tax deducted at source claimed by the assessee in the return of income. In view of the above credit of tax deducted at source of Rs. 3,08,68,545/- has been denied and the eligible refund of the same amount was denied to the assessee. The assessee filed appeal before ld. CIT(A) in respect of the aforesaid non grant of TDS. 6. In appeal before ld. CIT(A), the assessee argued that firstly there is no mismatch in the amount of tax deducted at source claimed in the return of income as appearing in Form 26AS. The assessee submitted that the amount of Rs. 3,08,68,845/- claimed by the assessee is duly reflected in Form 26AS and hence credit of the same was duly allowable to the assessee. The assessee submitted that the only reason given for denial of TDS in the 143(1) order is that there is mismatch of TDS in intimation but notably, in Form 26AS such TDS, is already reflecting. The assessee produced relevant extracts of the Form 26AS before ld. CIT(A) for his perusal and submitted that even in the official website of the Income Tax Department, it is displayed that tax credit claimed by the assessee in the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee submitted that it received advance from Government of Kerala against the funded works of the project under development as per the Concession Agreement which includes works like site development and fish lending berth etc. Out of the total value of funded work of Rs. 146300 Lakhs, the assessee received 10% of the value during the year under consideration on which TDS was of Rs. 2,92,60,000/-. Since the project was under development, the grant has been classified Advance Against Funded Works and shown under the head other liability in schedule 12 of the Balance Sheet. On completion of the construction of funded works the total receipts against funded works will be considered as amortized over the concession period. The counsel for the assessee submitted that credit of TDS shall be allowed to the assessee in view of amended provisions of section 199 of the Act. Once when a particular amount is received by the assessee after deduction of tax at source has been duly deposited with the Government, then the assessee becomes entitled for credit of TDS even if the assessee has not directly offered the said income to tax. The assessee submitted that as per the amended def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in written submission (supra), A.O. CPC has treated return of income filed by appellant as valid return of income and processed such return. The AO has observed that there is mismatch in TDs claim but as per form 26AS submitted by appellant, claim made in return of income is as per such form 26AS only. The appellant has treated interest income earned by it as capital receipts and reduced from Capital Work in Progress. Even advance grant received by appellant from government of Kerala against the Funded Works of the Project is treated as capital receipt by appellant. Whether such income is capital receipt or revenue receipt is subject matter of regular assessment only and once appellant has shown such income as capital receipt or reduced its Cost of construction, TDS credit cannot be denied on the ground that such income are not offered to tax in current year. Hon'ble Chennai Bench in case of Supreme Renewable Energy Ltd. [2010] 3 ITR (Trib) 339 on identical facts has held as under: The deposit on which interest was earned by the assessee is mandatory as per statutory requirement. Therefore, the interest income earned on the deposit is not out of surplus funds of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1961 - Deduction of tax at source - Credit for tax deducted - Assessment year 2007-08 - Whether in case where amount on which tax was deducted at source is not at all chargeable to tax, command of section 199 will have to be harmoniously and pragmatically read as providing for allowing credit for tax deducted at source in year of receipt of amount, in which tax was deducted at source - Held, yes - One 'G' desired to take franchisee of T, a brand belonging to assessee-company - For said purpose 'G' needed to take a property on rent - Since landlords did not know franchisee very well, they did not prefer to enter into a direct agreement with 'G' - Thus, a rent agreement was executed between 'A' Ltd., a sister-concern of assessee and franchisee in terms of which 'G' paid rent to assessee after deduction of tax at source - Assessee paid over gross amount to 'A' Ltd. and 'A Ltd. in turn paid rent to landlords after deduction of tax at source - AO noted that assessee had claimed credit for tax deducted at source without offering amount of rent for taxation from which such tax was deducted - He, therefore, held that amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is not at all chargeable to tax, command of section 199 will have to be harmoniously and pragmatically read as providing for allowing credit for tax deducted at source in year of receipt of amount, in which tax was deducted at source. 9.2 In the case of Zelan Projects (P.) Ltd.[2015] 63 taxmann.com 334 (Hyderabad - Trib.) , the assessee-company was an erection contractor for thermal power stations and it used to sub-contract same to other contractors. Assessee received mobilisation advance against contract procured. While making payment of mobilisation advance to assessee, TDS was deducted by power company under section 194J. Since the said contract was not fully executed during year under consideration, assessee did not declare any income during the year.Theassessee submitted that since no bill was raised on power company, no income was recognised and expenditure incurred on payment made to sub-contractors was shown as work-in-progress. The Assessing Officer allowed assessee credit of said tax deducted.The Ld. Pr. CIT sought to revise assessment on ground that credit for TDS was liable to be given only in respect of income which was assessable to tax in relevant assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed its return claiming refund of tax deducted at source from its bills by State Government. The Assessing Officer opined that since no real work was carried on by assessee, no income had accrued to it; and, therefore, credit for TDS was not allowable in hands of assessee in terms of Rule 37BA(2)(i).The High Court held that since there was no privity of contract between State Government and constituent of assessee i.e. sub-contractor, and, moreover, income from contract entered into between assessee and State Government was assessable only in assessee's hands, credit for tax deducted at source was to be given to assessee alone. 9.6 In the case of Escorts Ltd v DCIT [2007] 15 SOT 368 (Delhi)[11- 05-2007] , the ITAT held that once tax is deducted on income credited by assessee in its books of account and a requisite certificate to this effect is issued by deductors after deposit of tax amount in Government treasury, assessee becomes entitled to credit of such TDS while computing tax liability for relevant period. Further, ITAT held that credit for TDS must in every case be given to assessee from whom income-tax was deducted at source and paid to credit of Central Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 depositor or owner of property or of unit holder 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
