TaxTMI 
TaxTMI 
2015 (6) TMI 66
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, the Assessing Officer found that the assessee has received mobilisation advance of Rs. 14.49 crores against the contract procured by it from Lanco Amarkantak Power P. Ltd., (in short "LAPPL") for setting-up its 300 MW thermal power station. The said advance was shown by the assessee as its liability in the balance-sheet and a total sum of Rs. 16.22 crores paid to the sub-contractors for the execution of the contract received from LAPPL was shown as work-in-progress. No income from the said project, however, was recognised or declared by the assessee for the year under consideration. While making the payment of mobilisation advance to the assessee, tax at source was deducted by LAPPL under section 194J treating the same as fees paid for professional and technical services. While explaining its stand of not recognising any income from the contract procured from LAPPL, it was submitted by the assessee before the Assessing Officer that the said contract was not fully executed during the year under consideration and since no bill was raised on the said party, no income was recognised and the expenditure incurred on payment made to sub-contractors was shown as work-in-progress. This e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee to explain as to why the order passed by the Assessing Officer under section 143(3) should not be revised under section 263 withdrawing the credit allowed for the TDS. In reply, it was submitted by the assessee that there was no error in the order of the Assessing Officer in giving credit for the TDS made by LAPPL from the payment of mobilisation advance made during the year under consideration. It was also submitted that giving such credit for TDS, in any case, did not cause any prejudice to the interests of the Revenue as the issue involved was limited as to which year the credit for TDS should be given. The learned Commissioner of Income-tax did not find merit in the submissions made on behalf of the assessee. According to him, as per the provisions of section 199 as applicable to the year under consideration, credit for TDS was liable to be given only in respect of the income which was assessable to tax in the relevant assessment year. He held that since the amount of mobilisation advance received by the assessee was not chargeable to tax in its hands for the year under consideration as held by the learned Commissioner of Income-tax (Appeals), the credit allowed by the As....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 under section 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 the amended provisions of sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch payment of tax has been made.' 9. In the light of these amendments, we have also examined the judgment of this Hyderabad Tribunal in the case of Progressive Constructions Ltd. v. Joint CIT I. T. A. Nos. 482 and 557/Hyd/2001 and the order of the Tribunal of the Chennai Bench in the case of Supreme Renewable Energy Ltd. v. ITO [2010] 3 ITR (Trib) 339 (Chennai) and Toyo Engineering India Ltd. v. Joint CIT [2006] 5 SOT 616 (Mum) in which the Tribunal has taken a consistent view that the credit of TDS should be given in the year of receipt. The facts of the case of Progressive Constructions Ltd. and Toyo Engineering India Ltd. are almost similar to that of the present case. In the case of Supreme Renewable Energy Ltd. [2010] 3 ITR (Trib) 339 (Chennai), 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, the 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 : &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee is entitled for credit of TDS relating to interest income.' 6.1. From a careful perusal of the legal propositions laid down through the aforesaid orders by the Tribunal and the relevant provisions of the Act, we are of the view that once the TDS was deducted and paid to the Central Government, a credit of the same should be given to the assessees in order to avoid all sorts of complications in the year of deduction of the TDS. Therefore, we find no infirmity in the order of the Commissioner of Income-tax (Appeals) who has rightly directed the Assessing Officer to allow the credit of the TDS in the impugned assessment year. Accordingly, the order of the Commissioner of Income-tax (Appeals) is confirmed." It is manifest from the relevant portion of the Tribunal's order as reproduced above that the issue involved in the present case is squarely covered in favour of the assessee by the co-ordinate Bench's order on merit whereby, similar issue involving identical facts has been decided by the Tribunal in favour of the assessee after taking into consideration all the relevant aspects of the matter including the provisions of section 199 as applicable to the assess....