TMI BlogA Landmark Judgment on Tax Credit Entitlement - Credit of TDS if deductor failed to deposit the TDS to the GovernmentX X X X Extracts X X X X X X X X Extracts X X X X ..... mary question was whether the assessee was entitled to credit for tax deducted at source (TDS) in a transaction with Koutons Group. Transaction Details and Initial Proceedings The assessee held a 25% equity stake in S.R. Resorts Pvt. Ltd. and engaged in a transaction with a total consideration of Rs. 198,99,66,655. After TDS deduction at 10.3%, he received Rs. 178,50,00,000, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibits direct tax demands on an assessee to the extent tax has been deducted from their income. Indirect Recovery and Adjustment of Demand : The Court observed that indirect recovery of tax or adjustment of demand against future refunds, when tax has been deducted at source, is barred under Section 205 . Section 199 of the Act : The Court exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of whether the deductor deposited it with the Central Government. The Court's decision was based on the principle that the nature of the amount retained by the deductor does not change and remains as 'tax'. As a result, the assessee cannot be denied credit for the tax deducted at source, even if the deductor, acting as an agent of the Central Government, fails to deposit the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple of fairness in tax administration and reinforces the legislative intent behind tax credit provisions. This ruling serves as a protective measure for taxpayers, ensuring that they are not wrongfully burdened due to procedural lapses by deductors. Full Text : 2023 (12) TMI 34 - DELHI HIGH COURT - FAQ - Frequently Asked Questions, TMI Short Notes , Experts comment, opinion Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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