R.K. Distilleries Private Limited Vs ITO (ITAT Hyderabad)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals), which had upheld the denial of tax deducted at source (TDS) credit and the consequent adjustment made by the Central Processing Centre (CPC) for Assessment Year 2020–21. The dispute arose from a mismatch between the TDS claimed by the assessee and the amount reflected in Form 26AS, resulting in an additional demand of ₹13,15,270.
The assessee, engaged in the manufacturing of IMFL, had filed its return declaring income of ₹1,66,47,890. It had raised an invoice in March 2020 for bottling services and accounted for the corresponding income in the same financial year in accordance with the mercantile system of accounting. Accordingly, the assessee claimed TDS credit in Assessment Year 2020–21.
However, the deductor accounted for the transaction and deducted tax in the subsequent financial year, i.e., Assessment Year 2021–22. This led to a mismatch between the TDS claimed by the assessee and the amount reflected in Form 26AS. The assessee did not claim TDS credit in the subsequent year, as it had already claimed the credit in the year in which the income was offered to tax.
