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TMI Blog2022 (11) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... sions filed by the Appellant on 23rd August 2021 and further erred in holding that no submissions were made by the Appellant. 3. The learned CIT(A) erred in not granting TDS credit of Rs. 66,49,131/- on the ground that the receipts from National Highway Authorities were not credited to the Profit & Loss account. 4. Having regard to the facts and circumstances of the case the Assessing Officer be directed to grant further credit for TDS Rs. 66,49,131/-. 5. The learned NFAC erred in confirming the interest under section 234B of Rs. 23,09,726/- as against Rs. 98,434/- payable as per the Return of Income. 6. The learned NFAC erred in confirming the interest under section 234D of Rs. 43,967/- as against Nil leviable. 7. Having regard to the facts and circumstances of the case the Assessing Officer be directed to reduce the interest under section 234B and section 234D." 3. The relevant facts in brief are that the Appellant filed return of income on 30.10.2017 declaring loss of INR 74,03,960/- and book profit under Section 115JB of the Act of INR 3,95,08,905/-. The case of the Appellant was selected for scrutiny. In the computation of income, the Appellant had claimed credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant was only required to arrange for the utility shifting work and therefore, the Appellant appointed L&T Ltd. (hereinafter referred to as "the Sub-Contractor") for carrying out the said utility shifting work. It is the contention of the Appellant that the Sub-Contractor raised invoices on the Appellant at periodic intervals and the Appellant, in turn, raised corresponding invoices of the same amount on NHAI. To record the above transactions in its books, the Appellant opened a separate ledger account-"6500023-NHAI Utility Shifting". Appellant, deducted tax at source at the rate of 2% under Section 194C of the Act. Similarly, the Appellant while making payment of utility shifting charges to Sub-Contractor, tax at source at the rate of 2% under section 194C of the Act. Since the transactions with the NHAI were of the same amount as that of transactions with the Sub-Contractor, the balance in the abovesaid ledger account was "Nil". On account of back-to-back arrangement and there was no profit accruing to the Appellant. Therefore, the Appellant had not shown the receipts from NHAI and the corresponding expenses paid to the Sub-Contractor in the Profit and Loss Account. The imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounting to INR 23,016/- to the Appellant. 9.2. As regards tax deducted at source by NHAI the Ld. Authorised Representative for the Appellant had contended that the issue before us is squarely covered by the judicial precedents cited before us. 9.3. We note that in the case before us, the Appellant has not offered the contract receipts to tax. Whereas, in the case of Bhooratnam & Co. (supra) the assessee claiming the credit of tax deducted at source had offered for taxation the contract receipts. The issue before the Hon"ble Andhra Pradesh High Court was whether the Joint Venture executing the works contract or the individual Co-Joint Venturer would be entitled to claim credit of tax deducted at source. The income was offered to tax by the individual Co-Joint Venturer but the certificate of tax deducted at source was issued in the name of the Joint Venture. Taking note of the fact that the Joint Venture had not filed any return of income and thus, neither offered any income to tax nor claimed any credit of tax deducted at source, the Hon"ble High Court permitted the Co-Joint Venturer, offering corresponding receipts to tax, to claim credit of tax deducted at source. Similarly, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the common thread running through the above judicial precedents on the basis of which relief has been granted to assessees in varied facts and circumstances is that Revenue cannot be allowed to retain tax deducted at source without credit being available to anybody, and therefore, either the deductee or the person in whose hand income is assessable should be allowed to claim credit of tax deducted at source by granting purposive interpretation of the provisions of Section 199 of the Act and Rule 37BA of the Rules dehors the procedural requirements specified therein which should give way to substantial justice. In this regard, we are guided by the following observations of the Hon"ble Andhara Pradesh High Court in the case Bhooratnam & Co (supra): "13. S.199 (1) of the Act provides that any deduction of tax made in accordance with the provisions of Chapter XVII of the Act and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made. Under sub section (3) of Section 199, the CBDT may, for the purpose of giving credit in respect of tax deducted at source or paid in terms of the provisions of Chapter XVII of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for giving credit to such person. (iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody. (3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. (ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax. (4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of - (i) the information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorized by such authority: and (ii) the information in the return of income in respect of the claim for the credit, subject to verification in accordance with the risk management strategy formulated by the Board from time to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s REPL are sister concerns and M/s REPL has not raised any objection with regard to the assessee's TDS claim of Rs. 1,20,73,097/-. 8. This Court's reasoning is supported by a ruling of the Division Bench of the Andhra Pradesh High Court in CIT v. Bhooratnam & Co. [2013] 357 ITR 396/216 Taxman 6/29 taxmann.com 275 where the Court noted as follows: "In our view, the CIT (Appeals) and the Tribunal have rightly held that the assessee is entitled to the credit of the TDS mentioned in the TDS certificates issued by the contractor, whether the said certificate is issued in the name of the Joint Venture or in the name of a Director of the assessee company. They have considered the terms of the agreement dated 12-03-2003 among the parties to the joint venture and held that credit for TDS certificates cannot be denied to the assessee while assessing the contract receipts mentioned in the said certificates as income of the assessee. The income shown in the TDS certificates has either to be taxed in the hands of the joint venture or in the hands of the individual co-joint venturer. As the joint venture has not filed return of income and claimed credit for TDS certificates and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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