Haft Propbuild Private Limited Vs ITO (ITAT Delhi)
The appeal before the ITAT Delhi arose from the order of the Commissioner of Income Tax (Appeals)-15, New Delhi dated 30.09.2019 for the assessment year 2017–18. The dispute concerned disallowance of tax deducted at source (TDS) credit amounting to ₹1,85,392 by the Central Processing Centre (CPC) while processing the return under Section 143(1) of the Income-tax Act, 1961.
The assessee challenged the action of the CPC on multiple grounds. It contended that the TDS credit was duly reflected in Form 26AS and had been deducted on payments made to it. The assessee further argued that denial of such credit merely because the corresponding income was not shown in its return was unjustified. It also submitted that no notice was issued before making the adjustment under Section 143(1)(a), which is a mandatory requirement. Additionally, the assessee highlighted practical difficulties in claiming the TDS credit by another entity, since the credit appeared in its own PAN.
The factual background revealed that the assessee had entered into a collaboration agreement with another company for development of a township project. As per the agreement, any gains or losses arising from transactions involving the land were to be borne by the developer. During the relevant year, the assessee exchanged land with two parties and received consideration, including TDS. However, the entire amount was transferred to the developer company in accordance with the agreement. The developer, in turn, accounted for the income in its financial statements and paid taxes on it. Consequently, the assessee declared nil income while claiming the TDS credit.
