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TMI Blog2019 (5) TMI 1999X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same should be given in the year of TDS itself. We note that the authorities below have denied the assessee's request on various technicalities that the assessee should have made an application etc. for wrong deduction of TDS in this regard. In our considered opinion such mechanical approach of the Revenue is not justified. We draw support from case of CIT Vs. Shelly products and others [ 2003 (5) TMI 4 - SUPREME COURT] wherein it was held that assessee was entitled to refund excess tax paid out of abundant caution or owing to error or non-taxability. The common law maxim of aprobate and reprobate mandates that such a contradictory approach and shifting stands are not permissible. This view was reiterated by SUZUKI PARASRAMPURIA SUITINGS PVT. LTD. [ 2018 (10) TMI 484 - SUPREME COURT] Assessee deserves to succeed on this issue and accordingly we direct the Assessing Officer to give the credit for the TDS. - SHAMIM YAHYA, MEMBER (A) AND AMARJIT SINGH, MEMBER (J) For the Appellant : J.D. Mistry, Madhur Agarwal and Mayur Kisnadwala For the Respondents : Choudhary Arun Kumar Singh ORDER SHAMIM YAHYA, MEMBER (A) 1. This appeal by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected the AO to allow credit for TDS in subsequent assessment years in proportion to the mobilization advance recovered against appellant's legitimate dues and offered to tax in such subsequent assessment years. Head of Income for Interest income 6. On the facts and circumstances of the case and in law, the learned AO erred in assessing interest received of Rs. 4,52,073 on mobilization advance as Afcons as Income from Other Sources instead of Business Income Interest under sections 234B, 234C and 234D 7. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in not directing the AO to delete the interest of Rs. 15,081 levied under section 234B. 8. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in not directing the AO to delete the interest of Rs. 1,34,964 levied under section 234C. 9. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in not directing the AO to delete the interest of Rs. 7,03,483 levied under section 234D. 2. Brief facts are as under:- The facts of the case are that the assessee, an A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommencement of the project. The AO also observed that the assessee had claimed credit for Rs. 2,12,54,129/- (the amount of TDS done by the KMRCL against the mobilisation advance) even though no regular billing was done and only unbilled revenue was credited to the P L Account and that this was in violation of section 199 and Rule 37A. Assessment was completed vide order dated 31/12/2012 withdrawing credit for TDS of Rs. 2,12,54,129/-; disallowing expenses of Rs. 1,33,63,443/- and audit fees of Rs. 33,090/-. The present appeal is filed against this assessment order. 3. The assessee carried the matter to learned CIT(A) and pursuant to learned CIT(A)'s order on the above issues, assessee has filed the appeal before us and raised the ground as deleted above. 4. At the outset, learned Counsel of the assessee submitted that he shall not be pressing ground No. 1 to 4 relating to adverse inference of unbilled revenue and setting up/commencement of business. 5. Learned Counsel of the assessee submitted that he shall not be pressing ground No. 6. He submitted that the assessee shall be contesting only ground No. 5 and 5.1 above relating to non grant of TDS credit on mobilizati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same was of the nature of a temporary loan and was given against the bank guarantees offered by the appellant. It was further stated that in case credit for TDS was not allowed in the A.Y. under consideration, the same should be allowed in the subsequent assessment years in proportion to the advance recovered by KMRCL in those years. The AO however held that it was incorrect to say that the mobilisation advance was in the nature of short-term loan and that the appellant's contention that this was not on account of any contractual dues, was not correct inasmuch as the same was paid on account of contractual obligations as per clause 11.2.1 of the contract. The AO further noted that tax was correctly deducted on this amount as per section 194C and observed that as per Section 199 and Rule 37BA credit could only be claimed when corresponding income was offered to tax. In the present case, the AO noted that work had not commenced, no certificate to this effect was issued by the Engineer referred to in the contract and the contract itself was signed only about 10 days before the end of the financial year and as such the claim for credit of TDS was not acceptable. Accordingly, he w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l dues till 31st March for the Financial Year, relevant to the A.Y. under appeal, the question of adjusting any part of mobilization advance towards any contractual income does not arise. Therefore there cannot be any claim of TDS also. The appellant's alternative contention that the credit of TDS should be allowed in proportion to the extent of revenue recognised in the subsequent years is a claim that requires verification of facts of the succeeding assessment years and accordingly cannot be adjudicated in this appeal. As far as claim of credit of TDS on mobilization advance in subsequent years is concerned, it is for the appellant to make or revise its claim in the returns of income filed for subsequent years when the corresponding income is reflected as contractual receipt. In view of these facts, the withdrawal of TDS by the, A.O. is upheld and the grounds raised by the appellant are dismissed. 10. Against the above order, assessee is in appeal before us. 11. We have heard both the counsel and perused the records. At outset, learned Counsel of the assessee submitted that this issue is covered in favour of the assessee by the decision of ITAT in the case of ACIT Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne is an advance in the revenue field. In all the above cases, the Principal uniformly deducts tax at source u/s. 194C of the Act. From the record we found that the AO has discussed this on pages 18-21 of the assessment order and citing section 199 has disallowed credit of TDS of Rs. 1,29,31,900/- as the advances pertaining thereto are not credited to the profit and loss account during the year. The CIT(A), on page 73-74 para 11 of her order, concurred with the view of the AO. As per terms of various contract agreements under which Site Mobilisation Loan and the Machinery Mobilisation Loan I advances, mostly on interest ranging from @ 12% to 18% pa., have been granted against bank guarantee, In the balance sheet, such contractee advance mobilisation loan is reflected as loan funds under the head Contractee advances as a liability. Such loan can never be the income of the assessee, neither in present or in future; deduction of such loan advance from running bills is only a practical and convenient way to recover the loan. Such mobilisation loan being a capital receipt, there was no legal obligation on the part of the contractee to deduct tax at source u/s. 194C. If tax has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010-11 that the mobilization advance has been adjusted to the extent of Rs. 2,71,45,967/- and the first bills have been raised by the appellant. 15. Once it is the case of the Revenue that assessee has not commenced any business during the assessment year, it has not made any bill for the work done and revenue recognition is rejected and authorities below emphasized that only a sum of Rs. 93,79,58,000/- being the mobilization advance reflected in the balance sheet in liability is an acceptable figure, then how can it be said that the TDS deducted by the payer i.e. is correct is beyond comprehension. 16. These facts clearly indicate that on the facts and circumstances of the case, the payer had wrongly deducted TDS on this sum paid as mobilization advance. As held by the ITAT in M/s. Patel Engineering (supra), wherein it was expounded that the mobilization advance was not an income and that credit for any TDS on the same should be given in the year of TDS itself. We note that the authorities below have denied the assessee's request on various technicalities that the assessee should have made an application etc. for wrong deduction of TDS in this regard. In our considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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