2024 (8) TMI 539

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....to the IMFL license in the name of the license holder and declared the net profit from the sale business in the hands of the assessee only. 2.3 The assessee submitted before the Ld.AO that the license holder had not declared the profit from sales in his return of income and that the license holder did not claim TCS in his return of income relating to the sale based on the excise license. It is submitted that the license holder has not reflected the purchases and sales in the return of income. 2.4 It was thus submitted by the assessee that when the income from sale is offered by the assessee, TCS made on behalf of that business must also be given credit to the assessee only. In support of the contention, the assessee relied on the decisions of Hon'ble Madras High Court in case of CIT vs. Tanjore Permanent Bank Ltd. reported in 149 ITR 788 and Hon'ble Andhra Pradesh High Court in case of CIT vs. Bhooratnam & Co. reported in (2013) 29 taxmann.com 275. The CPC however did not appreciate the submission of the assessee and made addition and adjusted the prepaid taxes as TDS against the demand due for A.Y. 2016-17. 2.5 Aggrieved by the order of the Ld.AO, assessee preferred appea....

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....ted 12.10.2023 wherein, on identical issue TCS credit was allowed to the entity conducting the business, irrespective of the fact that the license was in the name of another person. She also placed reliance on the decision in assessee's own case passed by the erstwhile Ld.CIT(A) for A.Ys. 2016-17 to 2020-21 placed on record. On the contrary, the Ld.DR relied on the orders passed by authorities below. We have perused the submissions advanced by both sides in the light of records placed before us. 4. It is noted that the assessee is a partnership firm, and filed its return of income for the year under consideration claiming refund of Rs. 1,72,006/-. The Ld.AO in the assessment order did not grant credit of TCS amounting to Rs. 1,69,337/- and adjusted the resultant refund against the dues for A.Y. 2016-17. The Ld.AO withheld the TCS on the purchases declared by the assessee in the return of income. It is noted that, the purchases were accepted by the Ld.AO however, in turn denied the TCS credit on the ground that the TCS was collected and was reflecting in the account of one Mr. Prashanth Shetty from Mangalore, as he was the original owner of the excise license. 4.1 It is not....

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....22. However, the ADIT, CPC did not grant the credit of TCS amounting to Rs. 1,69,337.00 and adjusted the resultant refund against the dues of the earlier Assessment Year 2016-17. 0 3 4. The learned ADIT, CPC failed to grant TCS credit despite the fact that the TCS was withheld on purchases declared in the return of income. When the purchases were accepted, denying the corresponding TCS credit is erroneous and not in accordance with the law. 4 5. The learned ADIT, CPC has erred in law and on facts by rejecting the appellant's claim for the credit of Tax Collected at Source (TCS) amounting to Rs. 1,69,337.00, collected in the account of Mr. Prashanth Shetty, Mangalore due to the excise licence being in his name. Despite the fact that the 0 business was carried on by the appellant under an oral and mutual understanding and the income from such business was duly offered and declared by the appellant in its return of income, the learned ADIT, CPC did not allow the TCS credit to the appellant. This denial is contrary to the principles of equity and justice, as well as established legal precedents. 5 6. The appellant emphasizes a mutual 0 unde....

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....ould be allowed to the claimant who declared the income on which tax at source was deducted. In light of above, the credit for TCS should be given to the assessee which is finally and lawfully assessed to tax in respect of the corresponding income on which TCS has been collected. The fact that there are no specific rules which have been provided in the Income tax Rules in respect of credit of TCS in such situations on the lines of Rule 37BA, doesn't disentitle the assessee to claim credit of TCS in whose hands the income is finally assessed to tax 9 10. The very basis of the decision of the Jaipur 0 Bench of ITAT in the case of Jai Ambey Wines Vs. ACIT, order dated 11.01.2017 is based on the facts that what is applicable for TDS should also be applicable for TCS. The provisions of section 206C read with section 190 of the Act state that the nature of tax collection at source (TCS) is exactly identical to TDS and merely because there is no Rule identical to Rule 37BA(2)(i) of the Rules with reference to TCS provisions, it cannot be the basis claim for credit of TCS made to deny the legitimate The assessce should be given the by an as....