2021 (1) TMI 669

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....facts of the case are that the assessee is a company incorporated in and is a tax resident of United Kingdom and primarily involved in the production of and providing support in relation to military aircraft. Assessee claims to have been following the Mercantile system of accounting and the Revenue from the service contract is accounted for on Mercantile basis as per the terms of agreement, namely, as and when services are rendered in accordance with the proportionate completion method. The total Revenue received from Hindustan Aeronautics Limited for the assessment years 2017-18 and 2018-19 was Rs. 7,99,32,759/-, a service recipient, as reflected in form 26 AS for assessment year 2018-19. Out of this amount a sum of Rs. 4,31,87,175/- was o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ectly the tax deducted at source. 5. In the circumstances, the assessee is before us in this appeal stating that though the total income as disclosed by the assessee in the return of income was accepted during the processing of the return of income, but the credit for the corresponding TDS as claimed by the assessee was not given and ACIT also failed to grant the relief by looking at the facts and instead the Ld. CIT(A) directed the assessee to approach the director to rectify the TDS statement to report correctly the tax deducted at source. 6. While placing reliance on section 199 of the Act and also rule 37 BA of the Income Tax Rules1962 ("the Rules"), Ld. AR submitted that a harmonized reading of the Act and the Rules permit the grant ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... light of the provisions under section 199 (3) of the Act and also rule 37 BA (3) of the Rules, we are of the considered opinion that in this case where the tax has been deducted at source and paid to the Central government by the Hindustan Aeronautics Limited in the assessment year 2018-19 and such TDS relates to the income assessable over the assessment years 2017-18 and 2018-19, the credit has to be given in the proportion in which the income is assessable to tax for the assessment years 2017-18 and 2018-19 respectively. In the circumstances we are of the opinion that the ends of Justice would be met by directing the assessing officer to look into the fact whether the TDS deducted by the Hindustan Aeronautics Limited and reflected in for....