DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -2(1), PUNE vs. M/S. EMCURE PHARMACEUTIALS LTD, PUNE

Tersely stated, the factual position for the assessment year 2011-12 is that the assessee gave certain unsecured loans to its subsidiary company, namely, Emcure Pharmaceuticals, USA Inc. The Foreign company deducted tax at source on the amount of interest on loan credited to the assessee, which was eventually paid in a later year. The assessee offered interest income in its return of income and also claimed credit for TDS. The AO, in the order passed u/s.143(3), did not allow credit for the TDS. Thereafter, the assessee filed rectification application u/s.154, inter alia, requiring the AO to grant credit for such TDS. The AO in the instant proceedings arising, out of application u/s.154, did not accept the contention of the assessee. The ld. CIT(A), however, allowed the assessee’s claim. Aggrieved thereby, the Revenue has come up in appeal before the Tribunal.

We have heard the rival sides in Virtual court and gone through the relevant material on record. It is seen that the AO, in his order u/s.143(3), did not accept the assessee’s claim for allowing credit for the TDS against the interest income for the year under consideration, which was offered by the assessee in this year itself. The assessee assailed this issue in the second appeal before the Tribunal. Vide order dated 27-08-2019, the Tribunal, relying on certain decisions, accepted the assessee’s claim of granting tax credit in respect of the interest income that was shown by the assessee in the year under consideration. In view of the fact that the Tribunal accepted the assessee’s contention in the proceedings arising out of the order passed u/s.143(3), the instant appeal on the very same issue, flowing from the order passed u/s.154, has virtually become infructuous. Respectfully following the order passed by the Tribunal for the same year allowing Foreign Tax credit in respect of interest income offered during the year under consideration, we uphold the impugned order on this score.

The facts for the assessment year 2012-13 are admittedly mutatis mutandis similar to the immediately preceding year.

For this year also, the AO did not allow credit for Tax credit on interest income credited by the foreign entity. The assessee moved application u/s.154 and the instant proceedings arose out of such application. The assessee assailed the order u/s.143(3) before the higher authorities. The Tribunal accepted the assessee’s contention and the ld. CIT(A) in the impugned order has followed the view point of the Tribunal in allowing the assessee’s claim. Since the facts and circumstances of the instant appeal are similar to those for the assessment year 2011-12, following the view taken hereinabove, we uphold the impugned order.

In the result, both the appeals are dismissed.