Double taxation risk on disputed receipt year leads to fresh verification of assessability and TDS credit

A receipt alleged to have accrued in one year but offered to tax in the subsequent year requires verification where the record is insufficient to confirm the correct year of assessability. The operative concern is to prevent the same amount from being taxed twice and to ensure that TDS credit is granted in the correct year if otherwise admissible. On the limited material available, the addition was set aside for fresh factual examination by the Assessing Officer.

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Issues: Whether the addition of Rs. 40,00,000 made on the basis of AIR information on the footing that the amount had accrued in the relevant assessment year was sustainable, and whether the matter required verification to avoid taxing the same receipt twice.

Analysis: The receipt was stated to have been treated by the assessee as advance and offered to tax in the subsequent year, while the lower authorities proceeded on accrual in the year under consideration and on the basis of TDS credit claimed in that year. The appellate record did not contain sufficient material to conclusively verify the assessee's claim that the same amount had already been offered to tax in the subsequent assessment year. In these circumstances, the issue required factual re-examination so that the same receipt was not brought to tax twice and the corresponding TDS credit, if otherwise admissible, was granted in the correct year.

Conclusion: The addition was set aside for fresh verification by the Assessing Officer, with direction to ensure that the amount was not taxed in both years and that TDS credit was allowed in accordance with law.

Ratio Decidendi: A receipt should not be taxed twice, and where the year of accrual and the year of taxation are disputed on limited material, the matter may be remanded for verification of the correct year of assessability and corresponding TDS credit.

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