TaxTMI 
TaxTMI 
2010 (9) TMI 695
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....mmon order. 2. Shri K.V.N. Charya, the learned DR submitted that the only issue arises for consideration is giving credit for the tax deducted at source (TDS) while receiving the mobilisation advance by the assessee. According to the learned DR the assessee claimed TDS without offering the corresponding income for taxation. The Assessing Officer found that since the income was not offered for taxation credit shall not be given for the tax deducted at source u/s. 199 of the Income-tax Act, 1961. However, the CIT(A) by following the order of this Tribunal in Progressive Construction Ltd. vs. JCIT in I.T.A. No. 482/Hyd/2001 dated 23.11.2006 found that the nexus between the TDS and the corresponding income would remain notional/ conceptual. ....
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....ncome is assessable. The Tribunal further observed that the nexus between the TDS and corresponding income element would remain rather notional/conceptual. This Tribunal followed the decision of the Mumbai Bench of this Tribunal in Toyo Engineering (I) Ltd. (5 SOT 616). The decision of the Hyderabad Bench of this Tribunal was distinguished by the Bench by following the decision Mumbai Bench of this Tribunal. The decision in the case of Progressive Construction Ltd. (supra) was subsequently followed in a number of other cases. Therefore, according to the learned counsel for the assessee this Bench of the Tribunal is bound by the decision of the co-ordinate Bench of this Tribunal on identical circumstances of the case. ... 4. Shri Raghaven....
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.... paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given." 6. From the Third Member decision of the Chandigarh Bench of this Tribunal it appears that section 199 was amended by Finance Act, 1987. Till June 1, 1987 the language employed by the Parliament in section 199 was different insofar as it provided giving credit to the assessee in respect of TDS for the assessments immediately following the assessment year. However, by Finance Act, 1987 the language of section 199 was substantially modified to give credit to....
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....been received. The Assessing Officer has, in my view, been reasonable to give credit for the tax deducted at source to the extent the income has been offered for taxation by the assessee in the year under appeal. As pointed out earlier, the assessee has disclosed the amount of TDS as income in the year under appeal as provided under the statute and credit to the extent TDS relates to such income has been allowed by the Assessing Officer." 7. The Third Member while resolving the disputed question found that giving credit to TDS has nothing to with the system of accounting followed by the assessee. It is observed that section 199 of the Act provides for giving credit to the TDS in respect of the income which is offered for taxation. The Th....
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....come is disclosed or is otherwise found to be assessable by the Revenue." 8. In view of the majority opinion of this Tribunal it is very clear that unless the assessee offers the income for taxation, the TDS cannot be given credit. A similar view was taken by majority opinion by the Mumbai Bench of this Tribunal in Smt. Varsha G. Salunke vs. DCIT (2006) 98 ITD 141 (TM). 9. We have also carefully gone through the decision of this Tribunal in Progressive Construction Ltd. This Tribunal after considering the language of section 199 found that nexus between TDS and the corresponding income element would remain notional. However, the amendment made by the Parliament by Finance Act, 1987 was not taken into consideration by the Bench while d....