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TMI Blog2023 (12) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act (hereinafter referred to as 'the Act') on 24.06.2020 for the Assessment Year 2019-20. 2. The Assessee has raised the following grounds of appeal:- "1. On the facts and circumstances of the case, the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) is bad both in the eyes of law and on facts. 2. (i) On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on facts and in law in confirming the action of the AO (CPC) disallowing the credit of Rs 10,80,720/- on account of Tax deducted at source (TDS) claimed by the assessee. (ii) That the above disallowance of credit has been confirmed ignoring the contention of the assessee that the amount claimed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income for Assessment Year 2019-20 on 26.08.2019 claiming refund of Rs. 10,80,720/- on account of TDS u/s 194A of the Act deducted by Tata Projects Ltd. This return was duly processed u/s 143(1) of the Act, wherein the income returned was accepted but TDS credit of Rs. 10,80,720/- was not granted by the Ld. CPC u/s 143(1) of the Act, on the ground that the same is not reflected in Form No. 26AS of the assessee. This action of the Ld. CPC was upheld by the Ld. CIT(A) / (NFAC) by observing as under: 6. During appellate proceedings, in response to the hearing notice u/s 250 dated 18.10.2022 fixed for hearing on 27.10.2022 the appellant stated in his reply dated 27.10.2022 that the reason stated is mismatch in TDS credit whereas there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee i.e. "construction activity" was credited to other income and the same was reduced from the "Expenditure during the construction period" in the balance sheet. This was done on the ground that project of the assessee had not yet commenced and the entire expenditure incurred towards project had been routed under 'Expenditure during the construction period' and since the interest income earned on advances given to the contractors was inextricably linked with the business activity of the assessee, the same was duly reduced from the said project expenditure reflected in 'Expenditure during the construction period' in Balance Sheet. We find that there is absolutely no dispute that the interest earned on advances of the contractors were part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute that TDS has been deducted in respect of sale of software patches. The credit of TDS deducted on aforesaid sale has not been to the relevant assessment year as the assessee had not disclosed the income from sale of software patches and modules and the same was instead reduced from the cost of software development. The assesses following Project Completion Method to recognize its revenue. The assesses is now claiming credit of TUS which has been earlier denied to the assessee. As per provisions of section 159 of the Act, tax deducties at source and paid to government exchequer is treated as payment of tax on behalf of the person for whom TDS was made. Rule 37BA(3) further clarifies that credit for TDS shall be given for assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self by taking advantage of legal technicalities. Even otherwise, once the income receipt has been deducted from the cost of machinery to be installed the assessee has indirectly offered the same for assessment and taxation because due to the reduction of cost of the machinery the depreciation on the said machinery would be lesser and the net result of this would be offering the same income otherwise. 7. xxxxxxxxxxxxx 8. xxxxxxxxxxx 9. From the above it is clear that when a particular income is received by the assessee after deduction of tax at source and the said TDS has been duly deposited with the Government and the assessee has received the requisite certificate to this effect, then on production of the said certificate the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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