Case Law Details
Brief of the case
In the case of Commissioner of Income Tax vs. DLF Commercial Project Corporation Delhi High Court held that Advance received cannot be treated as income of the assessee and TDS is not deductible on reimbursement of Expenses since it is not an income.
Facts of the case
1. The assessee is in the business of developing land for commercial, residential, retail, industrial parks, information technology parks, SEZ, etc. For AY 2007-08, during assessment proceedings, the Assessing Officer (“AO”) observed that the assessee had in its Balance Sheet shown stock of Rs 34,55,60,19,667/- and Current Liabilities as Rs 34,86,09,08,730/-, whereas in the Cash Flow Statement, it had shown stock of Rs 34,55,54,73,615/- and Current Liabilities as Rs 34,85,91,89,394/-.
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Dear Sir,
The assesse had to approach High Court to confirm that re-imbursement of expenses is not income under Income Tax Act for TDS purposes. But the same (re-imbursement of expenses) is subjected to service tax though the amount reimbursed is not for any service rendered. Again somebody has to file a writ to spell out that the same (re-imbursement of expenses) is not a service. Till recently tax was deducted at source (TDS) for the service tax part of the payment also. After a long battle it was decided that Service Tax is not income tax need not be deducted. The common man is not able to understand why such trivial issues are taken up to High Court, while the issue is very simple and understandable.