TaxTMI 
TaxTMI 
A Landmark Judgment on Tax Credit Entitlement - Credit of TDS if deductor failed to deposit the TDS to the Government
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....tion was whether the assessee was entitled to credit for tax deducted at source (TDS) in a transaction with Koutons Group​​. Transaction Details and Initial Proceedings The assessee held a 25% equity stake in S.R. Resorts Pvt. Ltd. and engaged in a transaction with a total consideration of Rs. 198,99,66,655. After TDS deduction at 10.3%, he received Rs. 178,50,00,000, with the absolu....
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....ssessee to the extent tax has been deducted from their income​​. * Indirect Recovery and Adjustment of Demand: The Court observed that indirect recovery of tax or adjustment of demand against future refunds, when tax has been deducted at source, is barred under Section 205​​. * Section 199 of the Act: The Court examined Section 199, which deals with the credit of ta....
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....t. The Court's decision was based on the principle that the nature of the amount retained by the deductor does not change and remains as 'tax'. As a result, the assessee cannot be denied credit for the tax deducted at source, even if the deductor, acting as an agent of the Central Government, fails to deposit the amount with the government​​. Implications of the Judgment ....