2022 (11) TMI 371

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.... 2. The learned CIT(A) erred in ignoring the submissions filed by the Appellant on 23rd August 2021 and further erred in holding that no submissions were made by the Appellant. 3. The learned CIT(A) erred in not granting TDS credit of Rs. 66,49,131/- on the ground that the receipts from National Highway Authorities were not credited to the Profit & Loss account. 4. Having regard to the facts and circumstances of the case the Assessing Officer be directed to grant further credit for TDS Rs. 66,49,131/-. 5. The learned NFAC erred in confirming the interest under section 234B of Rs. 23,09,726/- as against Rs. 98,434/- payable as per the Return of Income. 6. The learned NFAC erred in confirming the interest under section 234D of Rs. 43,967/- as against Nil leviable. 7. Having regard to the facts and circumstances of the case the Assessing Officer be directed to reduce the interest under section 234B and section 234D." 3. The relevant facts in brief are that the Appellant filed return of income on 30.10.2017 declaring loss of INR 74,03,960/- and book profit under Section 115JB of the Act of INR 3,95,08,905/-. The case of the Appel....

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.... work and the supply of utilities/services. The cost of shifting of the utilities was to be borne by NHAI, and the Appellant was only required to arrange for the utility shifting work and therefore, the Appellant appointed L&T Ltd. (hereinafter referred to as "the Sub-Contractor") for carrying out the said utility shifting work. It is the contention of the Appellant that the Sub-Contractor raised invoices on the Appellant at periodic intervals and the Appellant, in turn, raised corresponding invoices of the same amount on NHAI. To record the above transactions in its books, the Appellant opened a separate ledger account-"6500023-NHAI Utility Shifting". Appellant, deducted tax at source at the rate of 2% under Section 194C of the Act. Similarly, the Appellant while making payment of utility shifting charges to Sub-Contractor, tax at source at the rate of 2% under section 194C of the Act. Since the transactions with the NHAI were of the same amount as that of transactions with the Sub-Contractor, the balance in the abovesaid ledger account was "Nil". On account of back-to-back arrangement and there was no profit accruing to the Appellant. Therefore, the Appellant had not shown the re....

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....lant has offered to tax interest income of INR 2,30,136/- and therefore, the Assessing Officer is directed to grant credit of tax deducted at source by SBI amounting to INR 23,016/- to the Appellant. 9.2. As regards tax deducted at source by NHAI the Ld. Authorised Representative for the Appellant had contended that the issue before us is squarely covered by the judicial precedents cited before us. 9.3. We note that in the case before us, the Appellant has not offered the contract receipts to tax. Whereas, in the case of Bhooratnam & Co. (supra) the assessee claiming the credit of tax deducted at source had offered for taxation the contract receipts. The issue before the Hon"ble Andhra Pradesh High Court was whether the Joint Venture executing the works contract or the individual Co-Joint Venturer would be entitled to claim credit of tax deducted at source. The income was offered to tax by the individual Co-Joint Venturer but the certificate of tax deducted at source was issued in the name of the Joint Venture. Taking note of the fact that the Joint Venture had not filed any return of income and thus, neither offered any income to tax nor claimed any credit of tax deducted at....

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....ced on the same to demonstrate that not in all circumstances credit of tax deducted at source is given to the deductee. 9.6. Having said as aforesaid, we note that the common thread running through the above judicial precedents on the basis of which relief has been granted to assessees in varied facts and circumstances is that Revenue cannot be allowed to retain tax deducted at source without credit being available to anybody, and therefore, either the deductee or the person in whose hand income is assessable should be allowed to claim credit of tax deducted at source by granting purposive interpretation of the provisions of Section 199 of the Act and Rule 37BA of the Rules dehors the procedural requirements specified therein which should give way to substantial justice. In this regard, we are guided by the following observations of the Hon"ble Andhara Pradesh High Court in the case Bhooratnam & Co (supra): "13. S.199 (1) of the Act provides that any deduction of tax made in accordance with the provisions of Chapter XVII of the Act and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made. Un....

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.... (ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person. (iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody. (3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. (ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. (4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of - (i) the information relating to deduction of tax furnished by the deduc....

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.... the benefit of such claim has not been availed by M/s. REPL. Therefore, the revenue, having assessed M/s REPL's income in respect to such TDS claim cannot now deny the assessee's claim on the mere technical ground that the income in respect of the said TDS claim was not that of the assessee, given that M/s Relcom (the assessee) and M/s REPL are sister concerns and M/s REPL has not raised any objection with regard to the assessee's TDS claim of Rs. 1,20,73,097/-. 8. This Court's reasoning is supported by a ruling of the Division Bench of the Andhra Pradesh High Court in CIT v. Bhooratnam & Co. [2013] 357 ITR 396/216 Taxman 6/29 taxmann.com 275 where the Court noted as follows: "In our view, the CIT (Appeals) and the Tribunal have rightly held that the assessee is entitled to the credit of the TDS mentioned in the TDS certificates issued by the contractor, whether the said certificate is issued in the name of the Joint Venture or in the name of a Director of the assessee company. They have considered the terms of the agreement dated 12-03-2003 among the parties to the joint venture and held that credit for TDS certificates cannot be denied to the as....