2019 (12) TMI 592 - AT - Income Tax

Revised return - withdrawing the claim of TDS and reduction in corresponding professional income - credit for the TDS claim - as assessee is maintaining books of account on cash basis, though said to be deducted as tax at source by his client, since, it is not remitted to the Government account and not reflected in 26AS, it is clear that the assessee has not received the same - HELD THAT - Since the assessee is accounting his professional (actor) income on cash basis, the entire receipt including TDS has to be assessed in the respective assessment year. Therefore, the addition made in assessment year 2009-10 and 2014-15 are in accordance with law. However, since the assessee is claiming that the producers by name Silver Screen Movies and M/s. Maragadam Pictures have deducted the tax from the respective receipts, while determining the tax payable by the assessee, the AO is directed not to call upon the assessee to pay the corresponding taxes himself to the extent on which the tax has been deducted from the income of the respective assessment year, in accordance with Section 205 of the Income Tax Act, provided, that the assessee is able to furnish the TDS certificate issued by the respective deductor, supra, to that extent. Carry forward and set-off of unabsorbed depreciation against income from other sources and income from house property in the revised return of income / revised working of the statement of income - It is seen that the ld.CIT(A) has not taken cognizance of the fact that the assessee has admitted income from business and profession at ₹ 38,32,052/-. Therefore, the assessee is entitled to set-off the brought forward loss against such income. The AO shall verify the fact of income admitted from business and profession, as indicated above, and if it is the fact, then he shall allow the brought forward depreciation claim to the extent of availability of income under that head. To this extent, the assessee s appeal is allowed.

Summary

Issues:
- Disallowance of TDS claim and unabsorbed depreciation set-off for assessment years 2009-10 and 2014-15.

Analysis:
1. Assessment Year 2009-10:
- The assessee, an actor and producer, claimed a deduction of income at ?2,21,000 in the revised working statement of total income due to non-receipt of TDS certificate from the producer. The AO did not consider this claim. Additionally, the assessee sought to set-off unabsorbed depreciation against income from other sources and house property, citing a Supreme Court decision. The CIT(A) upheld the disallowances. The assessee argued for cash basis accounting and the applicability of the Supreme Court decision. The tribunal held that the entire receipt, including TDS, must be assessed in the respective year. However, the AO was directed not to demand taxes if TDS certificates were furnished.

2. Assessment Year 2014-15:
- In this year, the assessee received ?4,50,000 as film receipts but only declared this amount as income due to discrepancies in TDS reflected in 26AS. The tribunal considered the cash basis accounting and the non-reflected TDS amount. The tribunal directed the AO not to demand taxes if TDS certificates were provided. The tribunal also addressed the issue of set-off of unabsorbed depreciation, allowing it against the income from business and profession as per the Supreme Court ruling.

3. Overall Decision:
- The tribunal partially allowed the appeals for both assessment years. It upheld the disallowances but directed the AO not to demand taxes if TDS certificates were furnished. It also allowed the set-off of unabsorbed depreciation against income from business and profession as per the Supreme Court ruling. The orders were pronounced on 4th October 2019 in Chennai.