TaxTMI 
TaxTMI 
2017 (2) TMI 917
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....is dismissed as not pressed. 3. Coming to the second issue in the appeal, relating to withdrawing of TDS credit of Rs. 5,68,84,546/-, the facts are that the assessee company filed its return of income on 14.10.2010, declaring taxable income at Rs.Nil and refund of Rs. 5,68,84,546/- was claimed being TDS credit. The return was processed on 12.10.2011 u/s 143(1) of the Act, accepting the income returned and refund was issued along with interest. Subsequently, assessment was completed u/s 143(3) on 30.03.2013 determining the income of the assessee at Rs. 28,95,620/-. Further, credit given for TDS of Rs. 5,68,84,546/- in the intimation u/s 143(1) was withdrawn by the assessing officer while completing the assessment u/s 143(3) of the Act. The assessing officer noticed that during the year under consideration, the assessee obtained work contract vide letter of intent dated 08.04.2009 from M/s Essar Construction (India) Ltd, now known as Essar Projects (India) Ltd for supervision of certain construction, construction and erection, quality assurance and inspection activities at ISBL/OSBL units of Essar Oil Refinery Expansion Project for an amount of Rs. 52 crores which is to be paid base....
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....ssessee company and paid sum of Rs. 54,08,75,555/- during the year under consideration. Essar Engineering Services Ltd. vide letter dated 15.03.2013 stated that they have received payments from the assessee company amounting to Rs. 54,04,47,510/- in two assessment years i.e. 2010-11 and 2011-12 at Rs. 49,10,40,576/- and Rs. 4,94,06,934/- respectively. Essar Engineering Services Ltd. further stated that the entire advance of Rs. 54,04,47,510/- was paid back to the assessee in the financial year 2010-11 relevant to the assessment year 2011-12 as the contract could not be executed. The assessee contended that the whole contract got cancelled and the contract amount is yet to be returned back to the Essar Projects (India) Ltd. and the amount is shown as a liability in the assessment years 2011-12 and 2012-13 as per the copy of ledger accounts submitted to the assessing officer. The assessee contended that since the entire amount received by the assessee has been shown as refundable to Essar Projects (India) Ltd., as the contract could not be executed and got cancelled, no income has accrued to the assessee, whereas TDS has been deducted and paid to the Govt. account. The assessee conte....
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....TD 394] in support of his contentions. 7. The Ld. DR vehemently supported the orders of the authorities below. Referring to the provisions of section 199 of the Act, the Ld. DR submits that unless the income is offered, credit for TDS cannot be granted and since the assessee has not offered any income, he submits that the assessing officer has rightly withdrawn credit for TDS while completing the assessment. 8. We have heard the rival submissions, perused the orders of the authorities below. In this case, the assessee procured contract from Essar Projects (India) Ltd and received a sum of Rs. 54,08,75,555/- and in turn granted sub contract to Essar Engineering Services Ltd for an amount of Rs. 58,68,33,788/-. Essar Projects (India) Ltd. has given advance of Rs. 54,08,75,555/- to the assessee and the assessee in turn has given Rs. 54,04,47,510/- to Essar Engineering Services Ltd as advance in respect of the same contract to be executed by them. Essar Projects (India) Ltd deducted TDS of Rs. 5,68,84,546/- on the mobilization advance given to the assessee, which the assessee claimed as refund in its return of income filed for the assessment year 2010-11. It is the contention of the ....
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....allowed to the person while assessing the income in the hands of the payee. It is of paramount importance to note that this section recognizes a very important position of law, that the tax deducted at source is 'treated as a payment of tax on behalf of the person from whose income the deduction was made' and, consequently, 'credit shall be given to him from the amount so deducted.' So the role of section 199 is confined to allowing the credit for the tax deducted at source to the payee of the amount and none else. Thus, it is evident that section 199 only deals with allowing of the credit for the tax deducted at source and not with the disallowing of such credit. It does not encompass within its purview the question for determination as to whether the credit for tax deducted at source should at all be allowed or disallowed. This enabling provision cannot be employed to disable the allowing of credit for the tax deducted at source from the payment made to the assessee in the nature of income. Evidently, it can never be contemplated nor it can be the case of the revenue that the no credit for the amount of tax deducted at source should be allowed in a given situation....
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.... assessee received the amount after deduction of tax at source from 'G' and such amount is not admittedly chargeable to tax in its hands, the credit for the tax deducted at source should be allowed in the instant year." (Emphasis supplied)." 11. Similarly, the Chennai Bench of the Tribunal in the case of Supreme Renewable Energy Ltd. Vs. ITO (supra) held as under. "From the above it is clear that when a particular income is received by the assessee after deduction of tax at source and the said TDS has been duly deposited with the Government and the assessee has received the requisite certificate to this effect, then on production of the said certificate the assessee becomes entitled for the credit of TDS even if the assessee has not directly offered the said income for tax as the assessee considered the same was not liable to tax. In view of the above-mentioned decisions of the Tribunal, it is clear position of law that when TDS is made on a particular income which is otherwise not liable for tax, the assessee is entitled for the said credit of the TDS. In the case in hand when the assessee has earned interest on deposit mandatory for acquisition on installation of mac....