Tribunal grants TDS credit to assessee despite unoffered income

The Tribunal allowed the appeal of the assessee, directing the AO to grant TDS credit withdrawn earlier under section 154 of the IT Act. The Tribunal held that the assessee was eligible to claim TDS credit despite not offering the corresponding income, as the TDS certificates were in the assessee's name and appeared in Form 26AS. The decision was supported by the provisions of Section 199 of the Act and previous case law references, dismissing the revenue's arguments and upholding the assessee's position.

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Issues:
Appeal against order of CIT(A) under section 154 of the IT Act for A.Y.2011-12 - TDS credit withdrawal - Income offered by different company - Justification of CIT(A)'s action - Eligibility of assessee to claim TDS credit without offering corresponding income.

Analysis:
The appeal was filed against the CIT(A)'s order confirming the withdrawal of TDS credit granted earlier to the assessee under section 154 of the IT Act. The AO withdrew the TDS credit of Rs. 44,82,512 as the corresponding income, in consequence to demerger, was not offered by the assessee. The CIT(A) upheld the AO's action, noting that the income was shown in a different company than the one claiming TDS credit.

The assessee argued that the income for which TDS was deducted was initially offered by the assessee company but later transferred to a resulting company due to a High Court order. The assessee did not claim TDS relating to the income transferred to the resulting company. The assessee relied on a Delhi High Court decision to support their claim for TDS credit even when corresponding income was not offered for tax.

The Tribunal found that though the income was transferred to the resulting company, the TDS certificates were in the name of the assessee and appeared in the assessee's Form 26AS. The TDS was claimed by the assessee as the corresponding income was not transferred to the resulting company. The Tribunal referred to the provisions of Section 199 of the Act and other relevant case laws to support the assessee's claim for TDS credit.

The Tribunal held that the AO was not justified in denying the credit of TDS in the hands of the assessee company, especially when the corresponding income was not offered by the resulting company. The Tribunal directed the AO to allow the credit of the TDS deducted in the hands of the assessee company, thereby allowing the appeal and dismissing the revenue's contentions.

In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the eligibility of the assessee to claim TDS credit even without offering the corresponding income, based on the specific circumstances and legal provisions cited during the proceedings.

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