AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 1070
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for M/s Raymonal Ltd., products for the states of Karnataka Goa, filed his return for asst. year 2012-13 on 30/9/2012 declaring income of Rs. 3,92,56,910/-. The case was taken up for scrutiny and the assessment was completed u/s 143(3) of the Incometax Act, 1961 (in short 'the Act'), wherein the assessee's income was determined at Rs. 3,97,60,968/- in view of an addition of Rs. 5,04,063/-u/s 198 of the Act on account of TDS credited upto 31/3/2012. On appeal, the ld CIT(A) dismissed the assessee's appeal vide order dated 30/8/2016. 3.1 Aggrieved by the order of the ld CIT(A)-7, Bangalore dated 30/8/2016 for asst. year 2012-13, the assessee has filed this appeal before the Tribunal, wherein the following grounds are raised:- "1. The Orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t received is carried forward for subsequent years for tax credit as provided under section l99ofthe Income Tax Act, 1961 r.w.r 37BA(3)(i)(ii). 5. The Learned Assessing Officer while completing the assessment treated Rs. 5,04,063/- being the unutilized TDS carried forward as undisclosed TDS and has invoked the provisions of section 198 of the Income Tax Act, 1961 and made additions of Rs. 5,04,063/- during the year. 6. The Learned Assessing Officer has failed to appreciate that under Section 198, the amount of tax deducted at source under the provisions of Section 192 to 196D is, so far as affected person is concerned, to be treated as income received by him. For the purpose of computation of his total income, gross salary, gross divide....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Assessing Officer has added TDS from Raymonds Ltd amounting to Rs. 5,04,063/- for the assessment year 2012-13 the break of which is as follows : Name Certificate No. Section Code Total TDS TDS utilised in assessment year 2012-13 Balance Carried Forward Raymonds Ltd RMYDHQ 194 A 1,65,360/- 7,460/- 1,57,900/- Raymods Ltd SXDXRL 194 H 5,90,060/- 2,43,897/- 3,46,163/- TOTAL 5,04,063/- It is seen from the above that the Assessing Officer has added Rs. 5,04,063/- TDS, as undisclosed TDS which is added to income. 9. The Learned Commissioner of Income Tax (A) is not correct in holding that tax deducted is deemed income under section 198 of the Income Tax Act, 1961 and adding the tax deducted at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tant year. The proportionate credit of TDS at 10% has been allowed by the A.O out of the undisclosed TDS of Rs. 5,04,063/-. The amount of this undisclosed TDS has never been a point of dispute. But the only contention regarding the amount is regarding the addition to the total income." Section 199 reads as follows: (1) Any deduction made in accordance with the foregoing pro-visions of this Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the was made, or of the owner of the security, or of the depositor or of the owner of property or : e unit-holder, or of the shareholder, as the case may be. (2) Any sum referred to in sub-section (1A) of section 192 and paid to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the year in which the income is assessable to tax. The Learned CIT(A) has erred in holding that Rs. 5,04,063/- is rightly assessed as undisclosed TDS and taxable under section 198. The Learned CIT(A) has overlooked the aspect of income returned at gross as per section 198 and to the extent of the income received during the year and there is no undisclosed income/TDS. Section 198 is not a computation provision. Where the accounts are maintained under cash basis, the income will be taxable only on receipt basis. In such a case, Section 198 has to be understood as applicable for the year in which such income is assessable. There is no bar for the tax deducted to be refunded in the year of deduction though the receipt is not taxed in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... provides that the CBDT, for the purposes of giving credit in respect of TDS or tax paid in terms of the provisions of Chapter XVII-B, make such rules as may be necessary, including for the purposes of giving credit to a person other than those referred to in sub-section (1) and (2) and also the asst. year for which such credit may be given. Rule 37BA(3)(ii) of the Rules specifies that where TDS has been made and paid to the central government and the income is assessable over a number of years, credit for TDS shall be allowed across those years in the same proportion in which the income is assessable to tax. From a perusal of the facts on record, as discussed above, it is seen that the ld CIT(A) in the impugned order has brushed aside and ....