SHETBRO HOTELS & RESORTS PVT. LTD.,MUMBAI vs. ITO 13(3)(2), MUMBAI

Assessee by: Shri Sunil Nahta Department by: Shri M. C. Omi Ningshen सुनवाईकीतारीख / Date of Hearing: 02.01.2017 घोषणाकीतारीख /Date of Pronouncement:. 15.02.2017 आदेश / O R D E R

PER AMARJIT SINGH, JM:

2. The assessee has raised the following grounds:- “1. On the facts and circumstances of the case and in law CIT(A) erred in dismissing the appeal in merit.

ITA No.2205.M.16 A.Y. 2013-14

communication of the Under Secretary dated 01.01.2015 referred to by the appellant, it only directs the Assessing Officer to refrain from coercive recovery of such demand on account of tax credit mismatch. It nowhere says that the credit of claim of TDS should be given even if the same has not been paid to the Government account. Further, it is not even clear that such amount has been deducted as TDS. On merits, the ground of appeal is dismissed. Nevertheless, the Assessing Officer is directed to verify the credit now appearing in 26AS and allow credit based on the amount appearing in the department records.”

5. On appraisal of the above mentioned order the reason which has been given by the CIT(A) for not accepting the contention of the assessee is that the assessee failed to show any evidence that the tax has been deducted at source because no such TDS certificate was issued to the appellant. It is also not clear that an amount of Rs.80,000/- is the TDS amount. The assessee entered into an agreement of leave and license with M/s. Om Sai Auto World which lies at page 15 to 21 of the paper book. According to the said agreement the assessee was entitled to recover an amount of Rs.2,00,000/- per month. The assessee received an amount of Rs.1,80,000/- per month in accordance with bank statement lies at page 25 which speaks that the licensee deducted the TDS but nothing came into the notice that the licensee deposited the same with the Central Government or not. But is not the liability of the appellant to pay the TDS when the TDS has already been deducted by the licensee. In this regard, we are also found support of law 4

ITA No.2205.M.16 A.Y. 2013-14 settled in Yashpal Sahni Vs. Rekha Hajarnavis, Assistant Commissioner of Income Tax (Supra) in which the issue has been decided in favour of the assessee. The finding of the said law is hereby reproduced as under for ready reference. “In the instant case, the assessee had established that from his salary income-tax had been deducted at source by the employer-respondent No.6 and, therefore, the revenue had to recover the said TDS amount with interest and penalty from respondent No.6 alone and the revenue could not seek to recover the said amount from the assessee in view of the specific bar contained under section 205. The fact that the assessee was not entitled to the credit of the tax deducted at source for the non-issuance of the TDS certificate by the respondent No.6, could not be a ground to recover the amount of tax deducted at source from the assessee. In other words, even if the credit of the TDS amount was not available to the assessee for want of TDS certificate, the fact that the tax had been deducted at source from salary income of the assessee would be sufficient to hold that as per section 205, the revenue could not recover the TDS amount with interest from the assessee once again. In the result, the petition succeeded. As respondent No.6 had deducted the tax at source from the salary income of the assessee, the revenue could not have recovered the said amount with interest at the rate of 6 per cent from the date of recovery till the date of payment. Thought the credit of the tax deducted at source was not available to ITA No.2205.M.16 A.Y. 2013-14 the assessee, since the said liability was not recoverable from the assessee, the revenue was directed to earmark the said TDS liability as ‘not recoverable’ from the assessee’.