What did the Tribunal hold?

The Tribunal held that the authorities below erred in appreciating the assessee's submission that the brokerage income was offered for taxation. The issue needs to be examined afresh by the Assessing Officer.

The assessee offered brokerage income of Rs. 16,82,153 for taxation but did not claim credit for TDS of Rs. 1,68,215 deducted by the deductor, as the deductor had deposited the TDS late. The Assessing Officer added the brokerage income, and the CIT(A) confirmed the addition.

What were the issues?

Whether the assessee is entitled to credit for TDS when the income has already been offered for taxation, despite the deductor's delay in depositing the TDS.

Nirmal Bang Securities P.Ltd vs ACIT | ITAT Mumbai 2019

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA & SHRI RAM LAL NEGI

For Appellant: Shri Anant N. Pai

For Respondent: Shri Aarsi Prasad

This appeal by the assessee is directed against order 02.06.2017 passed by the learned CIT(A)–9, Mumbai, and pertains to the assessment year 2014–15. The grounds of appeal read as under:–

“Addition of Brokerage received of ` 16,82,153. The Hon’ble Commissioner (Appeals) has erred in confirming the addition of ` 16,82,153, on account of non claim of TDS of ` 1,68,215, deducted on brokerage received which was deposited late by the TDS deductor where as brokerage income of `

2 Nirmal Bang Securities Pvt. Ltd. 16,82,153, has already been offered for taxation and only the claim of TDS was not taken. The assessee has not placed reliance on any advance ruling and the Hon’ble CIT(A) has been mistaken with the facts of the case. Moreover, no TDS credit of ` 1,68,215, on the above brokerage income has been given while calculating the tax on assessed income even though the brokerage income has been added twice to the total income.”

On this issue, the Assessing Officer noted that in the 26AS statement, there was a tax deduction at source credit of ` 1,68,215. However, the Assessing Officer noted that the same was not reflected in the assessee’s return of income. Upon explanation, the assessee explained that the said sum represented income of ` 16,82,153, which has been duly been offered in the return of income, however, the credit for tax deduction at source for the sum of ` 1,68,153, was not taken as the deductor had not deposited the amount to the Government account in time. The assessee also requested that Assessing Officer to give it the credit for the tax deduction at source for the said sum of ` 1,68,215, however, the Assessing Officer proceeded to make the addition of ` 16,82,153.

Before the learned CIT(A), the assessee made the necessary submissions. However, the learned CIT(A) referred to the reliance by the assessee upon an Authority for Advance Ruling order and proceeded to sustain the Assessing Officer’s addition. Against this order, assessee is in appeal before us.

3 Nirmal Bang Securities Pvt. Ltd.

We have heard both the counsel and perused the material on record. Learned counsel of the assessee has contended that authorities below have clearly erred in appreciating the submission of the assessee. We note that the assessee has duly submitted that against the said tax deduction at source amount of ` 1,68,215, the assessee has already offered a sum of ` 16,82,153, as income. In these circumstances, in our considered opinion, this issue needs to be remitted to the file of Assessing Officer. The Assessing Officer needs to examine the issue afresh keeping in mind the assessee’s claim that the assessee has offered a sum of ` 16,82,153, as income and the assessee now wishes to claim credit for a sum of ` 1,68,215, being the tax deducted at source. Accordingly, the issue stands remitted to the file of assessing officer. Needless to add, the assessee should be given adequate opportunity of being heard. Both the counsel fairly agreed to the above proposition.

In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 22.05.2019

SD/– SD/– RAM LAL NEGI SHAMIM YAHYA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22.05.2019

4 Nirmal Bang Securities Pvt. Ltd.

NIRMAL BANG SECURITIES P.LTD,MUMBAI vs. ACIT 4(2)(1), MUMBAI

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