ACIT NON CORPORATE CIRCLE 10(1), CHENNAI vs. METRO TUNNELLING CHENNAI L & T SUCG JV, CHENNAI

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ITA 2969/CHNY/2018Status: DisposedITAT Chennai06 January 2020AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee offered income from contract receipts on a percentage of completion method. Therefore, the AO was not justified in disallowing the entire TDS credit, and the CIT(A) rightly allowed credit for income offered to tax.

What were the facts?

The assessee, a joint venture, was denied credit for TDS by the Assessing Officer on the grounds that the corresponding income was not offered to tax. The CIT(A) directed the AO to give credit to the extent of income offered to tax.

What were the issues?

Whether credit for TDS can be given for the assessment year when the corresponding income is offered to tax, and whether the amount shown as closing work in progress constitutes income offered to tax.

Which sections of the Income-tax Act were involved?

Section 199

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH : CHENNAI

Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO

For Respondent: Shri. T. Banusekar, C.A

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER:

1.

This is an appeal filed by the Revenue directed against the order of the Commissioner of Income Tax (Appeals)-12, Chennai (‘CIT(A)’ for short) dated 20.08.2018 for the Assessment Year (AY) 2012-2013.

ITA No.2969/2018 :- 2 -:

The Revenue raised the following grounds of appeal: 2.

‘’1. The order of the learned CIT(A) is erroneous in law and opposed to the facts and circumstances of the case.

2.1 The learned CIT(A) erred in directing the Assessing Officer to give credit for TDS to the extent of cumulative sales as on 31.03.2012 amounting to Rs.1,48,61,86,578/-. This amount is value of closing stock and not the sales as referred by the Id. CIT(A).

2.2 The learned CIT(A) ought to have referred to Sec. 199 read with rule 37BA wherein it is stated that TDS credit can be given only in the assessment year for which corresponding income is offered for taxation.

3.

For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT (A) may be set aside and that of the Assessing Officer be restored’’.

The brief facts of the case are as under: 3.

The Respondent-assessee namely M/s. Metro Tunnelling Chennai L & T SUCG JV is an AOP and joint venture, is engaged in the business of design and construction of underground stations. The return of income for the AY 2012-13 was filed on 30.09.2012 disclosing total income of Rs. 5,49,75,140/-. Against the said return of income, the assessment was completed by the Deputy Commissioner of Income Tax, Non Corporate Circle 10(1) Chennai (hereinafter called “AO”) vide order dated 30.03.2015 passed u/s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) at total income of Rs. 5,76,42,520/-. While doing so, the AO denied credit for TDS of ITA No.2969/2018 :- 3 -:

Rs.4,63,83,155/- received from Chennai Metro Rail Limited on the ground that corresponding income was not offered to tax.

4.

Being aggrieved, an appeal was preferred before the ld.CIT(A) who vide impugned order had directed the Assessing Officer to give credit to the extent of income offered to tax Rs.1,48,61,86,578/-

5.

Being aggrieved by the order of the ld. Commissioner of Income Tax (Appeals), the Revenue is in appeal before us challenging the correctness of the decision of ld. Commissioner of Income Tax (Appeals). It is submitted that the findings of the ld. Commissioner of Income Tax (Appeals) that sales of Rs.1,48,61,86,578/- was offered to tax is incorrect as the amount was shown in closing work in progress and it is further submitted that in terms of provisions of Section 199 of the Act credit for TDS can be given in the year in which corresponding income is offered to tax.

6.

On the other hand, the ld. Authorised Representative placed reliance on the order of the ld. Commissioner of Income Tax (Appeals).

7.

We heard the rival submissions and perused the material on record. The only issue in the present appeal relates to whether or not credit for TDS should be given for the year under consideration or not. The Assessing Officer disallowed the claim for credit for TDS on the ground that corresponding income was not offered to tax in the ITA No.2969/2018 :- 4 -:

year under consideration. From the perusal of the Balance Sheet and Profit and Loss Account, it is clear that assessee has been offering profit contract receipt received on percentage of completion method, during the year under consideration income from the contract receipt was offered to the extent of Rs.146,88,58,224/- and therefore the Assessing Officer was not justified in disallowing credit for entire TDS.

The ld. Commissioner of Income Tax (Appeals) has rightly allowed the credit in respect of income offered to tax. The decision of ld. Commissioner of Income Tax (Appeals) is in conformity with the provisions of Section 199 of the Act. Therefore, we do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals).

8.

In the result, the appeal filed by the Revenue stands dismissed.

Order pronounced on 6th day of January, 2020, at Chennai.

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