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TMI Blog2024 (11) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... cted at source and paid to the Central Govt. and as per said rule credit for TDS shall be given for the A.Y for which such income is assessable. We find, there is no dispute with regard to the provisions of section 199 r.w Rule 37BA(3)(ii) of the Income Tax Rules, 1962, however, whether the said provision is applicable to the given facts of the present case are not is to be seen. Admittedly, the assessee has received mobilization advances of Rs. 157.65 crores on which the TDS of Rs. 3,15,30,612/- has been deducted. CIT (A) has recorded a categorical finding that the works allotted to the appellant for which mobilization advance has been paid was cancelled. Once the contract awarded to the appellant got cancelled and no income accrues to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as failed to appreciate the fact that the assessee has claimed credit for TDS of Rs. 3,15,30,612/- but the corresponding income attributable to TDS amount was not disclosed in the return of income filed for the A.Y 2017-18. 4. Any other ground that may be urged at the time of hearing . 3. The brief facts of the case are that, the appellant company filed its return of income for the A.Y 2017-18, on 31/10/2017 returning total loss of Rs. 2,05,09,483/-. The case was selected for scrutiny and the assessment has been completed u/s 143(3) of the Act, on 31/12/2019 and determined the total income at Rs. 4,87,24,729/- and tax refundable at Rs. 2,23,19,902/- by allowing TDS credit of Rs. 3,57,74,970/-. The assessee has filed appeal against the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned CIT (A), the appellant submitted that it has received mobilization advance of Rs. 157.65 crores on which TDS of Rs. 3,15,30,612/- was deducted. Subsequently, the works allotted to the appellant for which mobilization advance given was cancelled. As per provisions of Rule 37BA(3)(ii) of the Income Tax Rules, 1962, when the income is assessable over a number of years, credit for TDS shall be given to those years in the same proportion, in which the income is assessable to tax. Since the work awarded to the appellant has been cancelled and amount has been returned, the appellant has claimed TDS credit for the A.Y 2017-18, because there is no question of spreading income to subsequent A.Ys. 5. The learned CIT (A) after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DS credit of Rs. 3,57,74,970/-. The CPC issued defect notice u/s 139(9) on 1/6/2018, as the TDS has been claimed but, the corresponding income has not been offered to tax as per provisions of Rule 37BA(3)(ii) r.w.s. 199 of the Income Tax Rules, 1962. In response, the assessee submitted that it has received mobilization advance of Rs. 157.65 crores, on which TDS was made by the deductor. Further, the mobilization advance has been refunded, because of cancellation of contract and thus, the appellant has claimed TDS for the A.Y 2017-18. Subsequently, the assessee filed rectified return on 28/06/2018 and restricted the TDS claim for Rs. 41,72,967/- and the assessee carried forwarded TDS at Rs. 3,15,30,612/- to subsequent A.Y. However, while com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, because there is no income to be offered on said contract, either for the A.Y in question, or for the subsequent A.Ys. The learned CIT (A) after considering the peculiar facts of the case, has rightly held that section 199 r.w. Rule 37BA(3)(ii) of the Income Tax Rules, 1962 is not applicable to the appellant and accordingly directed the Assessing Officer to allow TDS of Rs. 3,15,30,612/-. Therefore, he submitted that there is no error in the reasons given by the learned CIT (A) and thus, their order should be upheld. 8. We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. The provisions of section 199 of the Act, deals with credit for taxes deducted and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the question of spreading the income over the years does not arise and consequent Rule 37BA(3)(ii) cannot be applied to the assessee. Since the findings of the facts recorded by the learned CIT (A) that, works awarded to the appellant has been cancelled and mobilization advances received from the principal has been returned net of taxes, in our considered view, the assessee has rightly claimed credit for TDS deducted on said mobilization advance, because there is no income to be offered in the subsequent financial years. Therefore, we are of the considered view that there is no error in the reasons given by the learned CIT (A) to allow credit for the impugned A.Y and thus, we are inclined to uphold the findings of the learned CIT (A) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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