TDS credit cannot be denied when income is taxed in another concern's hands, subject to verification of no double claim.

TDS credit under section 199 of the Income-tax Act, 1961 cannot be denied merely because the corresponding income was offered by a sister concern, provided the tax was deducted and deposited and the same credit has not already been claimed elsewhere. Form 26AS and confirmation that the related income was declared by another concern supported the assessee's claim. Rule 37BA of the Income-tax Rules, 1962 was noted as recognising that credit may, in appropriate cases, be available to a person other than the deductee. The assessee was therefore held entitled to credit, subject to verification that the sister concern had not already claimed the same TDS.

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Issues: Whether credit for tax deducted at source could be allowed to the assessee even though the corresponding income was offered to tax in the hands of its sister concern and not in the assessee's hands.

Analysis: The assessee produced Form 26AS showing deduction of TDS and a confirmation that the related income had been declared by the sister concern. The governing principle under Section 199 of the Income-tax Act, 1961 is that TDS credit is to be given for tax deducted and deposited, and the Court relied on settled authority holding that such credit cannot be denied on a mere technical objection where the tax has been deducted, deposited, and not claimed by another person. Rule 37BA of the Income-tax Rules, 1962 was also noticed as recognising that credit may, in appropriate situations, be available to a person other than the deductee. Applying that principle, the assessee's claim was held admissible subject to verification that the sister concern had not already claimed the same credit.

Conclusion: The assessee was entitled to TDS credit, and the Assessing Officer was directed to allow the credit after verification that the sister concern had not claimed the corresponding TDS.

Final Conclusion: The appeal succeeded and the assessee obtained relief on the TDS credit issue.

Ratio Decidendi: TDS credit cannot be denied merely because the corresponding income has been taxed in the hands of another person, provided the tax was deducted and deposited and the same credit has not already been claimed elsewhere.

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