Goldmine Developers Pvt. Ltd. Vs DCIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi decided the assessee’s cross objection after noting that while the Revenue’s appeal for Assessment Year 2011-12 had already been dismissed, the cross objection remained undisposed. The dispute concerned an addition of Rs. 86,69,009 arising from a difference between the Tax Deducted at Source (TDS) credit claimed and the corresponding income disclosed by the assessee.
The Assessing Officer observed that the assessee had claimed TDS credit of Rs. 83,05,951 on receipts of Rs. 8,31,22,127, whereas only Rs. 6,75,95,185 had been credited to the profit and loss account. The assessee explained that receipts from one builder had not been recognised as income because, under its accounting practice, the corresponding commission income had not yet accrued and would be offered to tax in subsequent assessment years. The Assessing Officer rejected this explanation, holding that since the assessee had claimed TDS credit, the corresponding income had to be offered to tax under Section 198 of the Income Tax Act, and accordingly made an addition after reducing service tax from the commission income.
Before the Commissioner (Appeals), the assessee submitted a reconciliation between Form 26AS and the income disclosed in its books of account. The Commissioner (Appeals) observed that the builder had credited brokerage in the assessee’s account and deducted TDS, and that the assessee had also claimed credit for such TDS in its return. Referring to the brokerage agreement, the Commissioner held that the assessee’s right to earn brokerage had crystallised when the builder credited the brokerage amount. The Commissioner therefore upheld the Assessing Officer’s treatment of the brokerage income as taxable in the relevant year. However, accepting the assessee’s submission that the same income had already been offered to tax in Assessment Years 2012-13 and 2013-14, the Commissioner directed the Assessing Officer to rectify those subsequent assessment years under Section 154 to avoid double taxation by reducing the corresponding income from those years.
