ITAT Delhi allows TDS credit, remits depreciation issue back to Assessing Officer

The ITAT Delhi partly allowed the appeal, setting aside the disallowance of TDS credit and depreciation on a lost mobile phone. The ITAT Delhi held that the assessee's action regarding TDS credit was in accordance with the provisions of section 199 of the Income Tax Act, allowing the credit of the TDS amount. Regarding the depreciation on the mobile phone, the ITAT Delhi remitted the issue back to the Assessing Officer for reconsideration in light of relevant provisions of the Income Tax Act.

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Issues involved: Disallowance of TDS credit and depreciation on mobile phone.

Disallowance of TDS credit:
The Assessing Officer disallowed TDS credit of `38,270 as the assessee followed cash system of accounting and did not receive corresponding receipts during the year. The Assessing Officer held that credit for balance TDS was not allowed as per section 199 of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) upheld this decision. However, the ITAT Delhi referred to section 199(1) which states that any deduction made and paid to the Central Government shall be treated as payment of tax on behalf of the assessee from whose income the deduction was made. The ITAT Delhi found that the assessee's action was in accordance with the provisions of section 199 and allowed the credit of TDS amount.

Depreciation on mobile phone:
The Assessing Officer disallowed depreciation of `2,525 on a mobile phone that was lost during the year. The Commissioner of Income Tax (Appeals) confirmed this decision. The ITAT Delhi noted that in such a situation, the entire cost of the mobile phone should be taken out from the block. The ITAT Delhi remitted this issue to the file of the Assessing Officer to consider afresh in light of the observation and relevant section of the Income Tax Act.

In conclusion, the ITAT Delhi partly allowed the appeal filed by the assessee for statistical purposes, setting aside the orders of the authorities below regarding TDS credit and depreciation on the mobile phone.

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