KANAIYALAL KANTILAL PATEL HUF,SURAT vs. ITO WARD 6(2), SURAT

Grounds of appeal raised by the assessee are as follows: “1. On the facts and circumstances of the case, the learned Commissioner of Income tax (Appeals) has erred in confirming addition made by the Assessing Officer passed u/s 154 passed on 25.02.2020. 2. On the facts and circumstances of the case, the learned Commissioner of Income tax (Appeal) has erred in not allowing credit of Rs.60000/- in respect of property TDS carried over from AY 2015-16. 3. On the facts and circumstances of the case, the learned Commissioner of Income tax (appeal) has erred in not appreciating that TDS of Rs.60000/- was deducted in assessment year 2015-16 towards advance money received and no credit was taken as property was sold in AY 2016-17.

Brief facts qua the issue are that in assessee’s case the assessment was framed under section 143(1) by DCIT, CPC, Bangalore, dated 13.01.2020. The real facts are that in FY.2014-15, advance was received, against which TDS has been deducted and the same was reflected in 26AS but full consideration was not received hence as per assessee, the advance was not liable to be taxed and also TDS against that advance was not claimed but carried forward (c/f) to next year. Later on, the assessee filed rectification application under section 154 of the Act, to rectify the mistake apparent from record. However, CPC Bangalore rejected the application of assessee under section 154 of the Act.

Therefore, feeling aggrieved by the order of Assessing Officer (CPC Bangalore), passed under section 154 of the Act, the assessee carried the matter in appeal before Ld. NFAC/Ld. CIT(A) who has dismissed the appeal of assessee.

Learned Counsel for the assessee submitted that in FY.2014-15 advance received against which TDS has been deducted and the same was reflected in 26AS but full consideration was not received hence advance was not liable to be taxed and also TDS against that advance was not claimed but c/f to next year, therefore no any addition should be made in the hands of the assessee.

We have heard both the parties and perused the material available on record. We note that Ld. Counsel for the assessee took us through page No.53 of the paper book, wherein computation of total income, for assessment year 2016-17 is stated wherein assessee has mentioned that TDS paid Rs.60,000/- was deducted u/s 194IA in financial year 2014-15 the same was being carried forward in next financial year, 2015-16. The TDS being carried forward is claimed in current financial year and adjusted against the tax liability for the year under consideration. The Ld. Counsel for the assessee invited our attention on the page no.53 of the paper book, wherein From No.26AS is placed.

We have verified the facts of the assessee’s case and noted that in the financial year 2014-15 advance received against which TDS has been deducted and same was reflected in Form 26AS but same consideration was not received, hence, advance was not taken as income and TDS against that advance was not claimed. However, the assessee has carried forward to next financial year. In the next financial year 2015-16, relevant to AY.2016-17, full consideration was received and income was offered to tax and TDS was claimed. Therefore, we are of the view that these facts are to be examined by Assessing Officer. Therefore, we direct the Assessing Officer to examine the case of assessee and if he finds that in financial year 2015-16, if the assessee has received full consideration and income was offered to tax and the TDS which was not previously claimed in the financial year 2014-15, has been claimed by the assessee in financial year 2015-16, then TDS credit should be allowed to the assessee. Therefore, we remit the issue back to the file of Assessing Officer with a direction to examine the facts as narrated by us above and if the same is found as correct the Assessing officer should allow the benefit of TDS in accordance with law. The assessee is directed to co-operate in assessment proceeding, as and when called by Assessing Officer, he should file the relevant details and documents to prove his claim. This ground of assessee’s appeal is allowed for statistical purposes in above terms.