ITAT grants TDS credit, overturning CIT(A) decision, in favor of assessee The ITAT allowed the appeal, setting aside the CIT(A)'s order and directed the AO to grant the TDS credit of Rs. 36,85,776 to the assessee. Despite ...
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ITAT grants TDS credit, overturning CIT(A) decision, in favor of assessee
The ITAT allowed the appeal, setting aside the CIT(A)'s order and directed the AO to grant the TDS credit of Rs. 36,85,776 to the assessee. Despite technical objections, the ITAT found it unfair to deny credit when the income was already assessed in the assessee's hands. The director's AO later verified and instructed to grant the TDS credit, leading to the ITAT's decision in favor of the assessee.
Issues involved: - Denial of credit for tax deducted at source amounting to Rs. 36,85,776/- by the Assessing Officer.
Detailed Analysis: 1. The only issue raised by the assessee is against the order of Ld. CIT(A) upholding the order of AO denying the credit for tax deducted at source amounting to Rs. 36,85,776/-.
2. The assessee, engaged in the insurance business, received commission and incentives from an insurance company on behalf of the assessee. The TDS was deducted by the insurance company and reflected in Form 26AS of one of the directors. The director did not declare the income or claim TDS in his individual return, as the income belonged to the company. The AO denied TDS credit citing Rule 37BA of the Income-tax Rules, 1962.
3. The Ld. CIT(A) dismissed the appeal, stating that the TDS was not reflected in the company's 26AS statement, hence no credit was given. The CIT(A) rejected the claim for rectification under section 154, as no mistake was apparent in the order under section 143(1) of the Act.
4. The ITAT observed that the income was duly included and assessed in the hands of the assessee, even though TDS credit was denied. The assessment of the director did not consider the income or TDS. The director's AO later informed the assessee's AO to grant TDS credit after verification.
5. The ITAT disagreed with the CIT(A)'s conclusion, finding it unfair to deny TDS credit when the income was assessed in the assessee's hands. Despite technical objections, the ITAT directed the AO to grant the credit of TDS of Rs. 36,85,776/- to the assessee, considering the injustice of denying credit when the income was already assessed.
6. The ITAT allowed the appeal of the assessee, setting aside the CIT(A)'s order, and directed the AO to grant the TDS credit.
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