2016 (12) TMI 177 - AT - Income Tax

Tribunal grants appeal on TDS credit for commission income, stresses income-credit matching.

Mr. Raj Kapurchand Chandaria Versus Asstt Commissioner of Income Tax (CPC), Bengaluru and Income Tax officer (Int. Taxation) 1 (1), Mumbai.

The Tribunal allowed the assessee's appeal for statistical purposes, finding that the issue regarding the credit of tax deducted at source on commission ... Grant credit of tax deducted at source on the commission received - Held that:- We find that the assessee has shown income of from commission of ₹ 1,42,89,500/--AY 2012-13 on which TDS was deducted on 31.03.2011. We further find that the AO assessed the income as shown by the assessee, however, credit was allowed of ₹ 37,08,000/- which was deducted during the financial year 2011-12 relevant assessment year 2012- 13 which was claimed by the assessee in the succeeding year i.e. AY 2013-14 as the corresponding income was received in that year. In other words, the ACIT allowed the credit of TDS which was deducted during the year whereas the assessee following system of accounting wherein the commission was shown as income under on receipt basis and also corresponding TDS was claimed. Therefore, we are not in agreement with the conclusion drawn by the Id. CIT(A) that ACIT-CPC has rightly allowed credit of TDS from the commission as the assessee has claimed TDS which was deducted on 31.3.2011 whereas the TDS of ₹ 37,08,000/deducted during the financial year 2011-12 and the credit whereof was claimed in AY 2013-14 as the income was received in that year. The issue raised in this appeal stands covered by the decision of the Tribunal in the case of Mr. Anish Kapurchand Chandaria [2016 (11) TMI 655 - ITAT MUMBAI] we allow the appeal of the assessee for statistical purposes. Issues:1. Credit of tax deducted at source on commission income.Analysis:The appeal was against the order passed by the CIT(A)-10, Mumbai for the assessment year 2012-13. The primary issue raised was the incorrect granting of credit for tax deducted at source on commission income received from AEGIS Logistics Limited. The assessee had declared a total income of &8377; 1,42,97,500, which included commission income of &8377; 1,42,89,500, with tax deducted at source of &8377; 44,15,455. The ACIT-CPC processed the return and raised a demand due to discrepancies in the credit allowed. The First Appellate Authority upheld the ACIT-CPC's decision based on the date of the transaction and the year in which the income should have been disclosed. The assessee contended that the credit of TDS should match the income disclosed for the relevant assessment year.The assessee argued that the issue was similar to a decision by a co-ordinate Bench of the Tribunal in another case. The Tribunal found that the ACIT had allowed credit for TDS deducted in a different financial year than the one in which the income was received. The Tribunal emphasized the importance of following the correct assessment year for income disclosure and TDS credit. It directed the AO to verify all contentions and ensure proper credit of prepaid taxes without any double claims. The Tribunal instructed the AO to grant sufficient opportunity for the assessee to present evidence and explanations.Considering the legal position and the facts presented, the Tribunal concluded that the issue raised in the appeal was covered by the decision in the referenced case. Therefore, the appeal of the assessee was allowed for statistical purposes. The decision was pronounced in the Open Court on 17.11.2016.