TMI Blog2022 (5) TMI 1554X X X X Extracts X X X X X X X X Extracts X X X X ..... ing regime effective from 01.08.1999 under the New Telecom Policy would be allowed as revenue expenditure. Since, the decision of the ld. CIT(A) is based on the order of the Tribunal, we hereby decline to interfere with the order of the ld. CIT(A) on this issue. Decided against revenue. TDS Credit on deferred revenue - AO disallowed TDS on deferred revenue by holding that if corresponding income is not taxable in a particular year, then corresponding credit for tax deducted may not be granted in view of section 199 in that year - AO held that merely because credit was claimed for tax deducted at source, it does not mean that the corresponding income is chargeable to tax - HELD THAT:- We find that this issue has been considered in as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... license to operate telecom services. 1.b) Whether the LD. CIT(A) has erred in not appreciating the fact that the shift from the fixed license fee regime to a revenue sharing regime only changed the methodology of calculating the license fee and does not alter the character of the license fee, which is payment for acquisition of right to operate the telecommunication services . 2. In ITA No. 8168/Del/2018, following grounds have been raised by the assessee: 1. That on the facts and circumstances of the case and in law, the Commissioner of Income-tax (Appeals) [ CIT(A) ] erred in not allowing credit of tax deducted at source ( TDS ) amounting to Rs.4,51,895/- on deferred revenue holding that the same would be allowed in the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT(A) on this issue. 5. In the result, the appeal of the Revenue is dismissed. ITA No. 8168/Del/2018 (Assessee s Appeal) Disallowance of TDS Credit: 6. During the course of assessment proceedings, the AO asked for details of TDS on deferred revenue and justification on its allowability. 7. The assessee submitted that having regard to the nature of the business, it is a common practice on the part of the assessee that during any financial year, some part of the revenue is deferred to subsequent financial year(s) and the revenue being deferred in earlier financial year(s) is booked as revenue in the relevant financial year. 8. The AO disregarded the contentions of the assessee and added the TDS credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Mumbai Bench of the Tribunal in the case of Toyo Engg. India Ltd vs. JCIT: [2006] 5 SOT 616 (Mum). 10. The AO disallowed TDS on deferred revenue by holding that if corresponding income is not taxable in a particular year, then corresponding credit for tax deducted may not be granted in view of section 199 of the Act, in that year. Further, the AO held that merely because credit was claimed for tax deducted at source, it does not mean that the corresponding income is chargeable to tax. 11. The assessee company has been offering its income in a consistent method in terms of the provision contained in section 145 of the Incometax Act, 1961 and therefore, the credit for the TDS amount from year to year needs to be given contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is dismissed. 14. We find that this issue has been considered by the Co-ordinate Bench of ITAT in assessee s own for the A.Y. 2014-15 directing the revenue to allow the proportionate credit of TDS for the income declared during the year under consideration. The relevant part of the order of the ITAT in assessee s own case in ITA No. 135/Del/2018 is as under: 23. We have given thoughtful consideration to the orders of the authorities below. We find that section 199(3) of the Act gives power to the Board to make such rules for the purposes of giving credit in respect of tax deducted or tax paid in terms of provisions of the Act and also A.Y. for which such credit may be given. Rules 37BA(3)(ii) provides that where tax has been dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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