Case Law Details
ACIT Vs. M/s Rahee Jhajharia E to E JV (ITAT Kolkata)
As per Section 199(3) of Income Tax Act, 1961 read with Rule 37BA(3)(i) and (ii) of Income Tax Rules, 1962 TDS can be granted only in the year in which the income/receipt on which such tax deducted at source is assessable to tax.
This appeal by the Revenue and the Cross objection by the assessee are directed against the order of the Learned Commissioner of Income Tax (Appeals)-9, Kolkata [ in short the ld CITA] dated 24.05.2017 which was passed against the order passed by the ACIT, Circle- 31, Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 02.02.2016 for the Assessment Year 2013-14.
2. The assessee is an AOP and is a joint venture of M/s Rahee Infratech Ltd. and M/s Jhajharia Nirman Private Ltd., both having 50% profit sharing ratio. During the impugned financial year, the assessee JV was engaged in the business of construction of road bed, Bridge, supply of Truck/ Rails, Track installation, Signaling and Telecom and Overhead Electrification and associated equipment. The issue before us is whether the Ld. CIT(A) was right in allowing credit of TDS of Rs. 12,96,167/- deducted from the payment of mobilization advance by M/s Moser Baer Construction Pvt. Ltd. Admittedly, the mobilization advance was not offered to tax during the impugned assessment year. The Assessing officer held that as per provision of Section 199 of the Act, credited of TDS made on mobilization advance cannot be allowed in the current year. The Ld. CIT(A) allowed the appeal of the assessee by applying the judgment of the Hon’ble Karnataka High Court in the case of CIT Central vs. Elsamex TWS-SNC(JV) had held that the mobilization advance was not an income as it was granted against the bank guarantee and was interest bearing. Since, the TDS was deducted on an amount that was not taxable, it is not the fault of the assessee and hence, the assessee is entitled to credit of Rs. 12,96,197/-. Aggrieved the revenue is in appeal before us on the following ground:
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