Archana Airways Ltd. Vs ITO (ITAT Delhi)
TDS Credit shall be given for the assessment year for which income is assessable
The Income Tax Appellate Tribunal, Delhi (“the ITAT”) in Archana Airways Ltd v. ITO [I.T.A. No. 8755/DEL/2019 dated November 2, 2022] held that Tax Deduction at Source (“TDS”) credit shall be given to the deductee for the Assessment Year (“A.Y.”) for which such income is assessable under the Income Tax Act, 1961 (“the IT Act”).
Facts:
M/s Archana Airways Ltd (“the Appellant”) filed return for the A.Y. 2013-14 declaring total income at a loss of Rs. 62,324/-. The return was proceeded under Section 143 of the IT Act and got selected for scrutiny. The assessment order was passed by the Assessing Officer (“AO”) on March 15, 2016 in which he disclosed the total taxable income of Appellant as Rs. 76,27,208/- under the head ‘Income from Other Sources’. AO made an addition of Rs. 65,00,000/- for undisclosed credit under Section 68 of the IT Act and of Rs.11,89,532/- for interest earned on fixed deposits.
The Appellant then filed an appeal before the Commissioner of Income Tax (Appeal) (“CIT(A)”) challenging the assessment order passed by the AO. The CIT(A) deleted addition of Rs. 65,00,000/- but sustained the addition of Rs. 11,89,532/- of interest on fixed deposits. The Appellant thus filed an appeal before the ITAT and stated that the said income cannot be said to have accrued in the A.Y. 2013-14, as it was accrued in the A.Y. 2017-18 after the order of Hon’ble High Court dated November 15, 2016 which has been physically received in the A.Y. 2017-18. The Appellant further submitted that he had offered for taxation of the said interest in the A.Y. 2016-17 and A.Y. 2017-18. Therefore, he was entitled for TDS Credit under Section 199 of the IT Act of such amount.
Issue:
1. Whether the addition of Rs. 11,89,532/- is justified made with respect to interest on Fixed Deposits Receipts (“FDR”) to be deleted?
2. Whether, in case the interest is to be taxed in AY 2013-14, then credit for TDS deducted on interest should be given to the Appellant?
Held:
The ITAT held as under:
