AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (3) TMI 1495
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....tract receipt of Rs.8,08,59,383/- received from M/s. Gammon India Limited. Assessee was asked to reconcile the gross work receipts in respect of sub-contract receipts received from M/s. Gammon India Limited and the reconciliation statement was filed. The assessee has stated that the gross receipts from M/s. Gammon India Limited was Rs.8,08,59,383/- and the balance amount of Rs.11,88,75,000/- as per TDS certificate represents mobilization advance received from the said party. It was also explained that mobilization advance could be adjusted against the sub-contract bills in the subsequent years. The A.O. observed that the receipt of Rs.11,88,75,000/- do not represent revenue receipt since it was a mobilization advance and therefore, it cannot partake the character of contract receipt. However, the same is to be adjusted against the work bills to be raised by the assessee in the subsequent years. The A.O. accordingly did not allow the credit of TDS for Rs.3,22,915/- out of 6 TDS certificate issued by M/s. Gammon India Limited for Rs.22,31,271/- because these certificates pertain to the mobilization advances given to the assessee. The A.O. was of the view that credit of TDS is allowed....
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....e Tribunal, Mumbai Bench in the case of Toyo Engineering India Limited, 5 SOT 616 directed the A.O. to allow the credit of TDS in the year under consideration. 5. The revenue preferred an appeal before the Tribunal with the submissions that Tribunal has taken a contrary view in similar type of situation. Therefore, the CIT is not justified in adopting the view that the credit of TDS can be allowed in the year of receipt of TDS certificate though the corresponding income was not offered to tax in that assessment year. The Ld. D.R. has also invited our attention to the provisions of section 199 of the Act with the submission that the credit of TDS can only be given on production of the certificate furnished u/s 203 in the assessment made under this Act for the assessment year for which such income is assessable. Since the corresponding income is not assessable in the impugned assessment year, the credit of TDS cannot be allowed to the assessee. 6. The Ld. Counsel for the assessee on the other hand has submitted that having realized this problem faced by certain type of assessees, the corresponding amendment was made in the provisions of section 199 of the Act and in the amended pro....
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.... bills to be raised in the subsequent years, it would gradually partake the character of the income of the assessees. Now the question arise, once the TDS was deducted on the receipt, how the credit of the same is to be allowed to the assessees? 8. We have carefully perused the provisions of section 199 of the Act and according to the pre-amended provisions of section 199, the credit of deduction made in accordance with the relevant provisions of this chapter and paid to the Central Government, shall be given for the amount so deducted on the production of the certificate furnished u/s 203 for the assessment made under this Act for the assessment year for which such income is assessable. But in the amended provisions the words "for the assessment year for which such income is assessable" has been omitted. Meaning thereby, that the legislature was quite conscious about the facts and hardships faced by some assessees, while making the amendments in section 199 and in amended provisions nothing has been stated about the year in which the credit of TDS is to be claimed. As per amended provisions of section 199, in sub-section 1, it has been stated that any deductions made in accordanc....
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....ew that the credit of TDS should be given in the year of receipt. The facts of the case of M/s. Progressive Constructions Ltd. (supra) and Toyo Engineering India Limited (supra) are almost similar to that of the present case. In the case of Supreme Renewable Energy Limited (supra), the Tribunal has held that when the interest income is incidental to the acquisition and installation of an asset and is not directly liable for tax, assessee is entitled for the credit of TDS from the interest income which has been duly received by the Government. The relevant observation of the Tribunal are extracted hereunder: "The deposit on which interest was earned by the assessee is mandatory as per statutory requirement. Therefore, the interest income earned on the deposit is not out of surplus fund of the assessee but due to the statutory requirement under which the deposit was made for availing the credit facility of installation of machinery. When the interest income is in the nature of capital then the assessee has rightly deducted the same from the cost of the assets and while doing so the assessee has offered the said income though capitalized for assessment. When the interest income is no....