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Income Tax Appellate Tribunal, ‘C’ BENCH, BENGALURU
Before: SHRI VIJAY PAL RAO & SHRI INTURI RAMA RAOShri Dev Prakash Gupta,
Date of hearing : 25/09/2017 Date of pronouncement : 28/09/2017 O R D E R
Per INTURI RAMA RAO, AM :
This is an appeal filed by the assessee directed against the order of the Commissioner of Income-tax (Appeals)-5, Bangalore, [‘CIT(A) for short’] dated 16/05/2016 for the assessment year 2009-10.
The assessee raised the following the grounds of appeal and additional grounds:
Briefly facts of the case are that the assessee is an individual. Return of income for the assessment year 2009-10 was filed disclosing income of Rs.33,86,800-. It was stated that the assessee also made a claim for credit of TDS of Rs.7,68,300/- on rental income received from M/s.Innovative Studios (P) Ltd.. Against said return of income, the Assessing Officer passed assessment order u/s 143(3) r.w.s. 147 vide order dated 22/09/2005 without granting credit for TDS claim of Rs.7,68,300/-.
Being aggrieved, an appeal was preferred before the CIT(A), who vide impugned order, dismissed the appeal on the ground that there was no evidence brought on record to show that M/s.Innovative Studios (P)Ltd. had actually deducted tax at Page 3 of 5 source nor Form No.16 issued by the deductor was filed during the course of hearing.
Being aggrieved, assessee is in appeal before us in the present appeal. Learned counsel for assessee vehemently contended that as per letter issued by M/s.Innovative Studios (P) Ltd., tax was deducted at the rate of Rs.68,500/- p.m. and drawn our attention to pages 1 to 8 of the paper book wherein copies of letters issued by the said party showing deduction of tax at source at the rate of 16.995% on monthly rental income of Rs.4,03,200/- was shown. Therefore, it is claimed that as per the ratio laid down by the Hon’ble jurisdictional High Court in the case of Smt.Anusuya Alva vs. DCIT (278 ITR 206)(Kar), credit should be allowed to the assessee and recovery of tax from the assessee should not be enforced for default of deductor to remit the amount to the account of the Central Government. On the other hand, learned Departmental Representative vehemently argued that in absence of any evidence for deduction of tax at source, credit cannot be given. He placed reliance on the orders of the lower authorities.
We heard rival submissions and perused the material on record. The only issue in the present appeal is whether the AO was justified in denying credit for TDS amount of Rs.7,68,300/-. No doubt, there was no evidence of TDS made from the assessee either in the form of challan or Form No.16 issued by the Page 4 of 5 deductor. The whole claim was made based on communication letters issued by the deductor i.e. M/s.Innovative Studios (P) Ltd. The Hon'ble jurisdictional High Court in the case of Smt.Anusuya (supra) laid down that in cases where tax was deducted and deductor failed to remit the amount to Central Government, credit to the assessee shall not be denied and the revenue is supposed to recover the amount only from the payer of the amount i.e. the deductor and the revenue is stopped from enforcing the demand from the recipient of income. But in the present case, there was no evidence of deducting amount except letters issued by the payer of the amount. In the circumstances, we remand this issue back to the file of the AO to verify whether tax was actually deducted by the payer i.e. M/s.Innovative Studios (P) Ltd and if so, grant credit for the same in the hands of the assessee.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.