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TMI Blog2023 (6) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2007-2008, the impugned order does not call for any interference. The reasoning set forth in the impugned order by the Tribunal is unimpeachable. Tribunal was right in holding that the advances which are once held to be not income, could not have been subjected to tax at source u/s 195 of the Act. Tribunal was right in concluding that the refund or grant of credit of such tax deducted at source, could not be denied. No substantial question of law - Decided against revenue. - ITA 276/2023 - - - Dated:- 15-5-2023 - HON'BLE MR. JUSTICE RAJIV SHAKDHER AND HON'BLE MR. JUSTICE GIRISH KATHPALIA For the Appellant Through: Mr Ruchir Bhatia, Sr Standing Counsel with Mr Shlok Chandra and Ms Priya Sarkar, Standing Counsel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore supplies made by it. However, before remitting the said amount the Board deducted Rs. 1,94,55,135/- towards tax at source and surcharge. Thus, the net amount which was remitted by the Board to the respondent/assessee [which is located in Japan] was Rs. 2,79,96,414/-. 7.1 It is in this backdrop that the respondent/assessee seeks credit of Rs. 1,94,55,135/- deposited on its behalf towards tax at source and surcharge. 8. We may note that Rs. 2,79,96,414/ [after deducting tax at source at the rate of 40% and surcharge], was remitted to the respondent/assessee in the Financial Year (FY) 2004-05 [AY 2005-06]. 9. The Tribunal in this background has returned the following findings of fact, which are recorded in paragraphs 14 to 16 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse the assessee had become entitled to refund of the said sum. Though, later on, again BBMV was directed to deduct tax @ 4% on the gross payment. Once the request of BBMB for grant of refund of excess TDS was rejected, BBMB had filed an application for revision u/s 264. However, in the order u/s. 264, Ld. CIT simply stated that M/s Sumitomo Corporation has filed income tax return for the said amount of TDS deducted had been claimed and the assessment proceedings have already been completed wherein has been allowed. Thus, the matter at that stage attained finality. 15. Now in the. re-assessment proceedings the Assessing Officer has denied the credit, of TDS after invoking the provision of Section 199. As pointed out by the Id. Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrued in India nor there is any finding that the amount received as advances represented any income which is assessable to tax in India. In fact, this sum has never been held to be assessable either in the Assessment Year 2005-06 when advance was received or in the Assessment Year 2007-08 when supplies have been made . As regards applicability of Section 1.99 for which reliance has been placed by the Id. CIT-DR and also raised in the grounds of appeal, it would be relevant to extract Section 199 as stood in the Financial Year 2005-06 as under: Credit for tax deducted: 199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a payment of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessable as his income.] 17. On a bare perusal of the aforesaid provision, it would be seen that said statutory provision provides that credit shall be given to him for the amount so deducted on the production of certificate furnished u/s 203 of the Act in the assessment made under the said Act for the AY for which such income is assessable. In other words, what is provided is that where a sum is held assessable to tax, the credit shall be given to him in that year. It has nowhere been provided that where a sum is not assessable to tax and has not been assessed to tax as is the case here, credit will not be given in the year in which tax has been deducted at source. 18. Thus the Assessing Officer was not correct in invoking th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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