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TMI Blog2024 (12) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... ences are placed on record, perusing the same, we find it appropriate to condone the delay and take up the matter for adjudication. 3. The sole issue raised by the assessee is in respect of interest income not received by the assessee and subjected to tax, owing to difference in method of accounting followed by the assessee and the party from whom interest is receivable. None represented the assessee before us. However, on perusal of the records, we are inclined to take up the matter for adjudication, exparte qua the assessee with the able assistance of ld. Sr. DR. 4. Brief facts of the case are that assessee filed his return of income on 11.03.2015 reporting total income at Rs. 29,59,350/-. Assessee earned income from salary, house property during the year. He is Executive Vice President of PBA Infrastructure Pvt. Ltd. In the course of assessment proceedings, ld. Assessing Officer noted that assessee had shown interest income of Rs. 37,28,381/-, which comprises of interest of Rs. 35,56,571/- from PBA Infrastructure Pvt. Ltd., Rs. 12,866/- as savings bank interest, Rs. 1,30,042/- as interest on FD with IDBI, Rs. 21,402/- as bank interest on FD, Rs. 1500/- as interest on bonds and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an interest of Rs. 35,56,571/- accrued to the assessee from PBA Infrastructure Pvt. Ltd. on which TDS of Rs. 3,55,657/- had been done and duly deposited by the said company, reflecting in Form 26AS of the assessee for the year under consideration. However, the interest so accrued has not been paid by the company to the assessee. According to the assessee, owing to the financial instability at the end of the company, it is uncertain about the receipt of the said amount from the company. 5.1. In order to avoid mismatch between the income and TDS reported in Form 26AS and the income to be reported by the assessee in his return of account of non receipt of the interest, assessee devised a methodology of reporting the same in his return under the head "income from other sources" and correspondingly claiming for deduction u/s. 57 of the Act. For this, he submitted explanations by justifying the differences arising out of the method of accounting followed by the company and by the assessee. 6. In our understanding, in order to deal with the situation faced by the assessee in the present case where interest payable by the company has been accrued on which TDS has been done and deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other income and is liable to be dealt with accordingly, in the order of assessment. Hon'ble High Court, further held that since the assessee has adopted cash system and did not receive the interest regarding which TDS was done, the TDS amount deserves to be treated as income. The attempt made by the assessee to treat the amount as tax for the corresponding amount was not permitted by the Hon'ble High Court. The appeal was partly allowed holding that assessee cannot be permitted to give credit to the amount representing TDS as tax and on the other hand, it shall be treated as an item of income for the concerned assessment year. 7.1. Drawing force from the aforesaid judgment of the Hon'ble High Court, we respectfully follow the same to hold that in the present case, the amount of TDS reflected in Form 26AS of the assessee for the year under consideration in respect of TDS done by PBA Infrastructure Pvt. Ltd. is to be treated as an item of income under the head "income from other sources" and provisions of section 198 be applied accordingly. It is important to note that once TDS is deducted, assessee cannot be permitted to use the certificate to cover other amounts while refusing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have been any controversy. The reason is that under the cash system, the liability to pay tax arises only when the concerned amount is received as income. The 1st company made TDS in respect of the amount payable to the appellant as interest and issued certificate. The appellant wanted to use the certificate in its entirety. In other words, the amount reflected in the TDS certificate was being shown as tax already paid. This would have devastating effect. The amount covered by the certificate would take care of the interest payable on other income of the appellant. For example, if the amount reflected in TDS constitutes tax payable on a sum of Rs. 1,00,000/-, that would have taken care of the income of the appellant to the extent of Rs. 1,00,000/- from other sources, though the interest as regards which the TDS was affected, was not reflected in the returns at all. All the authorities under the Act i.e., the assessing officer, the Commissioner and the Tribunal did not approve the method adopted by the appellant. 10. The appellant cannot be permitted to blow hot and cold at one and the same time. If no TDS was affected and interest was not paid, he would not have been under an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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