Court : CBDT
Brief : Direct taxation - Chargeability of Income - Credit of TDS - Assessee, clearing and forwarding agent - Filed income tax return and was accepted under Section 143(1)(a)- Due to some discrepancy in total gross receipts as per TDS certificate and that shown in profit and loss account, ordered reassessment - Whether addition made only because of the difference between the receipts as per TDS certificate and the receipts as per profit and loss account was correct? - Sections 147, 199, Income Tax act, 1961.
Citation : Income-tax Officer v. Sikka International Freight Services Pvt. Ltd (ITAT- Delhi) (Decided on 18-02-2010) MANU/ID/0071/2010
When income is assessed as business income, the same is to be on the basis of method of accounting regularly employed by the assessee. The tax is required to be deducted at source at the time of credit to the account of payee or at the time of actual payment thereof. Thus the deduction of tax at source does not determine the year of taxability of the receipt stated in the TDS certificate. At best if corresponding income is not taxable in a particular year, the corresponding credit for tax deducted may not be granted in view of Section 199 but reverse is not true. Merely because credit was claimed for tax deducted at source, it does not mean that the corresponding income is chargeable to tax. Since the income is chargeable to tax on the basis of method of accounting regularly followed by the assessee and in respect of which no discrepancy has been noticed by the Assessing Officer, the addition was rightly deleted.
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