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TMI Blog2016 (4) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... ip firm. TCS was claimed in the name of different persons. The assessee is entitled to get credit of TCS. We find that as per Rule 37BA, which has been amended from 1.4.2009, in above situation, the person to whom the payment has been made or credit has been given on the basis of information relating to deduction of tax furnished by the Deductor to the income of tax authorities or the persons authorized by such authority. Rule 37BA provides that where any income on which the tax has been deducted at source is assessable in the hands of persons other than deductee, the credit for tax deducted at source, as the case may be, shall be given to the persons and not to the deductee. We find that in this case, the assessment was made u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter carried to the ld. CIT(A) and the ld. CIT(A) dismissed the appeal. 4. The ld.Authorized Representative for the assessee has argued before us that in this case, the only dispute is giving short credit of TCS. The assessee claimed that the assessee is a partnership firm. Partners were license-holder and they have formed the partnership firm to carry on business in liquor. Therefore, TCS certificate was issued in the name of partners. The entire income of the firm was offered for tax in whose name the license was issued. The income has been assessed in the hands of the firm, but credit of corresponding TCS was not allowed. The assessee contended that partners have not claimed their credit of TCS in individual cases. Therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated 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 the Act, make such rules as may be necessary, including the rules for the purpose 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. Rule 37BA of the Rules framed u/s 199(3) of the Act (introduced w.e.f. 01.04.2009 by Income Tax (Sixth Amendment) Rule, 2009, by the CBDT) is as follows:- Credit for tax deducted at source for the purpose of Section 199. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1). (ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Rule 37BA which restricted the benefit of the rule only in four specified situations. It has thus widened the scope of the rule 37BA thereby enabling the credit of taxes to the actual payee in whose hands the income is assessable and not restricting this benefit only to the specified four situations. 8. As per above rules and interpretation of the Act, we are of the view that if the assessee is a partnership firm to carry on the business in liquor and TCS is claimed in the name of partner of the firm, the TCS collected by the party in the name of different persons, which reads as under :- S.No. Name of Partners Amount of TCS ( Rs.) 1. Avin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of persons other than deductee, the credit for tax deducted at source, as the case may be, shall be given to the persons and not to the deductee. We find that in this case, the assessment was made u/s 143(1). Therefore, in the interest of justice and fair play, we are of the view that the matter requires verification. We, therefore, restore this matter to the file of AO. The AO is directed to verify the claim of the assessee. We clarify that the assessee is a partnership firm doing the business of liquor and all the partners are license-holders and they have formed partnership to carry on the business of liquor. The TCS credit may be given to the partners if the partners have not claimed any TCS in their returns of income. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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