DASSAULT SYSTEMES SIMULIA PVT LTD.,CHENNAI vs. DCIT (OSD) CORPORATE RANGE 1, CHENNAI

The Assessee filed these appeals against the consolidated order of the Commissioner of Income Tax (Appeals)-1, Chennai, in & 510/CIT(A)-1/2017-18 & 2016-17 dated 27.06.2018 for the assessment years (AYs) 2013-14 & 2014-15, respectively.

M/s. Dassault Systems Simulia Pvt. Ltd., the assessee, transferred its entire business as a going concern to Dassault Systems India Pvt. & 2706/Chny/2018 :- 2 -: Ltd., w.e.f. 01.10.2011. Therefore, it discontinued its business from that date. The assessee has not disclosed any revenue from the operations during the years relevant to the AYs 2013-14 & 2014-15 respectively. However, it claimed credit for the TDS reflected in Form No.26-AS. While completing the impugned assessments, the AO restricted the TDS credits to the interest income admitted by the assessee. Aggrieved against those orders, the assessee filed appeals before CIT(A).

It claimed before the ld.CIT(A) that even though its business operations were transferred from 01.10.2011 to Dassault Systems India Pvt. Ltd., the customers of Dassault Systems India Pvt. Ltd., deducted taxes by wrongly quoting the PAN number of the assessee and hence, the TDS credits are in the assessee’s name and accordingly reflected in Form No.26-AS. It is submitted that Dassault Systems India Pvt. Ltd., has offered these receipts to tax in its returns of income and it did not claim the corresponding credit for the tax deducted at source as they are reflected in Form No.26-AS in the assessee’s name. The ld.CIT(A) dismissed the appeals. Aggrieved against those orders, the assessee filed these appeals. & 2706/Chny/2018 :- 3 -: 4. The ld. AR relied on the decision of Hon’ble High Court of Delhi in the case of CIT vs. Relcom [2015] 62 taxman.com 190 (Del.), the head note of which read as under: “Where due to an inadvertent mistake of vendor, TDS related to assessee’s sister concern was credited to assessee’s TDS account, assessee could claim credit of such TDS, provided its sister concern had not availed benefit of such TDS certificates.” and submitted that ld.CIT(A) without appreciating the facts and circumstances of the case wrongly distinguished this case and dismissed the appeals. Therefore, the ld.AR pleaded to allow the appeals.

Per contra, the ld. DR invited our attention to the assessment order, wherein the AO has not discussed the impugned issue at all. The ld. DR elaborately took us through the order of ld. CIT(A) and pointed out the law, procedure and the reliance placed by the ld.CIT(A) on the decision of the Hon’ble High Court of Gujarat in the case of Naresh Bhavani Shah (HUF) vs. CIT, [2017] 84 taxmann.com 53 (Guj) and supported the orders of ld. CIT(A). Further, the ld.DR submitted that from the orders of ld. CIT(A), it is clear that assessee claimed that M/s. Dassault Systems India Pvt. Ltd., has admitted impugned incomes in the respective assessment years but not claimed the impugned TDS. From the orders of lower authorities, it is clear that the assessee has not furnished any verified declaration from the person responsible for filing of returns of income of M/s. Dassault Systems India Pvt. Ltd., and related & 2706/Chny/2018 :- 4 -: documents as to prove that the assessee’s contention is a fact. Therefore, the ld. DR pleaded to confirm the orders of ld. CIT(A).

We heard the rival submissions and gone through the relevant material. It is clear that the assessee transferred its business as a going concern to M/s. Dassault Systems India Pvt. Ltd., as early as on 01.10.2011 and the assessee is not having any income from business during the impugned AYs. However, it claimed that the customers of M/s. Dassault Systems India Pvt. Ltd., deducted tax at source and remitted them quoting the PAN number of the assessee for such a long period from 01.10.2011 to 31.03.2014. It also pleaded that M/s. Dassault Systems India Pvt. Ltd., has admitted the corresponding income in its returns and did not claim the impugned TDS credits as they were not reflected in Form No.26AS in its name but reflected in the assessee’s name. However, as pleaded by the ld. DR, it appears from the orders of the lower authorities that the assessee has not produced any verified declaration from the person responsible for filing the returns of income of M/s. Dassault Systems India Pvt. Ltd., with relevant documentary evidences to support the contentions of the assessee. In the facts and circumstances, we deem it fit to remit this issue back to the AO for a fresh examination. The assessee shall furnish relevant material before the AO and thereafter shall comply with his written requirements, if any, & 2706/Chny/2018 :- 5 -: in accordance with law. The AO shall examine the issues and if he finds that M/s. Dassault Systems India Pvt. Ltd., the assessee’s group company, had admitted the impugned receipts as income and had not availed the benefit of such TDS certificates in the respective assessment year and supports the contention of the assessee, then the AO would grant the corresponding TDS credits to the assessee within 45 days from the assessee’s due compliance.

In the result, both the appeals filed by the assessee are treated as allowed for statistical purposes.