DHANVIR GOYAL,FARIDABAD vs. ITO, FARIDABAD

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ITA 384/DEL/2015Status: DisposedITAT Delhi15 July 2016AY 2012-133 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that credit for TDS must be given for the assessment year in which the income is assessable, as per Section 199 and Rule 37BA(3)(i). Therefore, the assessee is entitled to credit for the TDS deducted by HUDA.

What were the facts?

The assessee received enhanced compensation and interest from HUDA, with TDS deducted by HUDA. The AO assessed the interest income but refused to grant credit for the TDS. The CIT(A) confirmed the AO's order.

What were the issues?

Whether the assessee is entitled to credit for TDS deducted on interest income when the income is assessed in the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 199,Section 145A,Section 56(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC-I”: NEW DELHI

Before: SHRI P.K.BANSAL

For Appellant: Shri K.C. Singhal
For Respondent: Shri S.K. Mishra, Sr. DR
Hearing: 11/07/2016Pronounced: 15/07/2016

This appeal has been filed by the assessee against the order of the Ld. CIT(A) dated 11.12.2014. Ground No. 1 since not pressed dismissed as not pressed.

2.

The only issue involved in the other ground taken by the assessee relates to the credit to be given to the assessee in respect of the TDS amounting to Rs. 57128/- which was deducted by HUDA out of the payment of interest received by the assessee.

3.

I have heard the rival submissions and carefully considered the same. I noted that during the impugned assessment year the assessee received enhanced compensation of Rs. 1,56,833/- and interest thereon amounting to Rs. 5,04,220/- from HUDA on which HUDA has deducted TDS amounting to Rs. 57,128/-. The AO in the impugned assessment year treated the sum of Rs. 5,04,220/- as the income of the assesee on receipt basis but did not allow the credit for the TDS to the assessee.

4.

The assessee moved an application u/s 154 for the credit of the TDS u/s 199 r.w.r 37BA (3) of the Act which was rejected by the AO.

The Ld. CIT(A) confirmed the order of the AO. The provision of section 145A(b) mandates that the interest received by an assesee on compensation or on enhanced compensation has to be assessed in the year in which it is received under the head ‘income from other sources’ in view of the provision of section 56(2). Section 199 of the Income Tax Act empowers the Board may, for the purposes of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter XVII. The board has in this regard made rule 37BA (3)(i). This clearly specified that credit for tax deducted at source and paid to the Central Govt. shall be given for the asstt. Year for which such income is assessable. In the impugned case since the inertest received from HUDA has been assessed during the impugned assessment year therefore the revenue is bound to allow credit to the assessee for the TDS amounting to Rs. 37,128/- to the assesee during the impugned assessment year .

Not allowing the credit for the TDS in my opinion is a mistake of law apparent on record.

5.

I accordingly set aside the order of the Ld. CIT(A) and direct the AO to allow the credit to the assessee in respect of the TDS amounting to Rs. 57,128/- after verifying the interest income from the HUDA is assessed during the impugned assessment year.

6.

In the result the appeal filed by the assessee is allowed.

Order pronounced in the open court on 15/07/2016.

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