2022 (11) TMI 1062 - AT - Income Tax

Credit of TDS carried over - TDS being carried forward is claimed in current financial year and adjusted against the tax liability for the year under consideration - Whether TDS was deducted in assessment year 2015-16 towards advance money received and no credit was taken as property was sold in AY 2016-17? - HELD THAT - As in the financial year 2014-15 advance received against which TDS has been deducted and same was reflected in Form 26AS but same consideration was not received, hence, advance was not taken as income and TDS against that advance was not claimed. The assessee has carried forward to next financial year. In the next financial year 2015-16, relevant to AY.2016-17, full consideration was received and income was offered to tax and TDS was claimed. Therefore, we are of the view that these facts are to be examined by AO. We direct the AO to examine the case of assessee and if he finds that in financial year 2015-16, if the assessee has received full consideration and income was offered to tax and the TDS which was not previously claimed in the financial year 2014-15, has been claimed by the assessee in financial year 2015-16, then TDS credit should be allowed to the assessee. Therefore, we remit the issue back to the file of AO with a direction to examine the facts as narrated by us above and if the same is found as correct the Assessing officer should allow the benefit of TDS in accordance with law. The assessee is directed to co-operate in assessment proceeding, as and when called by AO, he should file the relevant details and documents to prove his claim. This ground of assessee s appeal is allowed for statistical purposes in above terms.

Summary

Issues:
Appeal against order passed by the Commissioner of Income Tax (Appeals) under section 154 of the Income Tax Act, 1961 for assessment year 2016-17.

Analysis:
The appeal pertains to the confirmation of additions made by the Assessing Officer under section 154 and the denial of credit for TDS carried over from the previous assessment year. The appellant contended that the advance received in FY 2014-15, against which TDS was deducted, was not liable to be taxed as full consideration was not received. The appellant also argued that the TDS against the advance was carried forward to the next year. The NFAC/CIT(A) upheld the Assessing Officer's decision, leading to the appeal before ITAT.

The ITAT reviewed the facts and noted that in FY 2014-15, the advance received had TDS deducted, but full consideration was not received, resulting in the advance not being taxed, and the TDS was not claimed. However, in FY 2015-16, corresponding to AY 2016-17, full consideration was received, income was declared, and TDS was claimed. The ITAT directed the Assessing Officer to re-examine the case to determine if the TDS credit should be allowed based on the correct facts. The appellant was instructed to cooperate and provide necessary evidence for their claim.

The ITAT's decision allowed the appeal for statistical purposes, remitting the issue back to the Assessing Officer for further examination. The appellant's arguments were considered valid, and the Assessing Officer was tasked with verifying the facts to determine the eligibility of TDS credit. The appellant's cooperation in the assessment process was emphasized for the proper resolution of the matter.

In conclusion, the ITAT's decision provided relief to the appellant by allowing the appeal for statistical purposes and directing a reevaluation of the TDS credit issue by the Assessing Officer based on the facts presented during the proceedings. The decision aimed to ensure fairness and adherence to the law in determining the tax liability related to the TDS carried over from the previous year.