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TMI Blog2010 (9) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... V. Madhu Vani Respondent by: Shri V. Raghavendra Rao ORDER PER NRS GANESAN, JM: All the appeals of the Department relate to three independent assessees. Since common issues arise in all the three appeals, we have heard all these appeals together and dispose of the same by this common order. 2. Shri K.V.N. Charya, the learned DR submitted that the only issue arises for consideration is giving credit for the tax deducted at source (TDS) while receiving the mobilisation advance by the assessee. According to the learned DR the assessee claimed TDS without offering the corresponding income for taxation. The Assessing Officer found that since the income was not offered for taxation credit shall not be given for the tax deducted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Raghavendra Rao, the learned counsel for the assessee submitted that this Tribunal in the case of Progressive Construction Ltd. (supra) considered this issue elaborately and found that credit shall be given to the TDS on production of the certificate for the assessment year for which such income is assessable. The Tribunal further observed that the nexus between the TDS and corresponding income element would remain rather notional/conceptual. This Tribunal followed the decision of the Mumbai Bench of this Tribunal in Toyo Engineering (I) Ltd. (5 SOT 616). The decision of the Hyderabad Bench of this Tribunal was distinguished by the Bench by following the decision Mumbai Bench of this Tribunal. The decision in the case of Progressive Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to in sub-section (IA) of section 192 and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. (3) The Board may, for the pur0poses of giving credit in respect of tax deducted or tax paid in terms of the provisions of this Chapter, make such rules as may be necessary, including the rules for the purposes of giving credit to a person other than those referred to in sub-section (1) and sub-section (2) and also the assessment year for which such credit may be given." 6. From the Third Member decision of the Chandigarh Bench of this Tribunal it appears that section 199 was amended by Finance Act, 1987. Till June 1, 1987 the language employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t source is assessable to tax. It is not disputed that the assessee has not offered the income credited by the three parties in respect of which tax has been deducted at source on the ground that income is offered to tax on receipt basis and the amounts have not in fact been received. The Assessing Officer has, in my view, been reasonable to give credit for the tax deducted at source to the extent the income has been offered for taxation by the assessee in the year under appeal. As pointed out earlier, the assessee has disclosed the amount of TDS as income in the year under appeal as provided under the statute and credit to the extent TDS relates to such income has been allowed by the Assessing Officer." 7. The Third Member while resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 199 and for the reasons given above, I am of the view that the Assessing Officer was right in allowing credit for tax deducted at source on pro-rata basis. The credit for the balance amount mentioned in the certificate is to be allowed in the year in which such income is disclosed or is otherwise found to be assessable by the Revenue. 8. In view of the majority opinion of this Tribunal it is very clear that unless the assessee offers the income for taxation, the TDS cannot be given credit. A similar view was taken by majority opinion by the Mumbai Bench of this Tribunal in Smt. Varsha G. Salunke vs. DCIT (2006) 98 ITD 141 (TM). 9. We have also carefully gone through the decision of this Tribunal in Progressive Construction Ltd. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us the assessee was following mercantile system of accounting. This issue was also considered by the Third Member in Chandigarh Bench of this Tribunal and found that method of accounting has nothing to do in giving credit to the TDS. In view of the above observation of the Third Member and the majority decision of the Chandigarh Bench of this Tribunal, we find no substance in the arguments of the learned counsel for the assessee. Moreover, admittedly, the assessee has not offered the corresponding income for taxation and the Assessing Officer has not made any addition also. In view of the above decision, we are unable to uphold the order of the CIT(A) and the same is set aside and the order of the Assessing Officer is restored. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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