Neelkanth Developers-POCM and TDS Credit
Neelkanth Developers-POCM and TDS Credit
Neelkanth Developers-POCM and TDS Credit
आदे श/ORDER
PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-
These two appeals filed by the assessee are against the order of
National Faceless Appeal Centre (NFAC), Delhi in DIN & Order Nos.
ITBA/NFAC/S/250/2021-22/1036974805(1) & ITBA/NFAC/S/250/2021-
22/1036974826(1), in proceeding u/s. 143(1) vide order dated 16/11/2021
passed for the assessment year 2018-19 & 2019-20. Since common issues
are involved in both the appeals and the consideration, the same are being
taken up for consideration together.
I.T.A Nos. 349 & 350/Ahd/2021 A.Y. 2018-19 & 2019-20 Page No. 2
Neelkanth Developers vs. Asst. Director of Income Tax
3. The brief facts in relation to the case before us are that the assessee is
builder and developer and has offered income on the basis of percentage
completion method, whereas the TDS has been deducted by the purchaser of
the property under section 194-IA of the Act at the time of execution of sale
deeds. Therefore, the case of the assessee is that that it is not possible at all
times to correlate a specific amount of TDS with the specific amount of
income earned by the assessee in a particular year. In the present case, the
counsel for the assessee submitted that the assessable income relating to
TDS credit claimed in this year has already been offered to tax in the current
I.T.A Nos. 349 & 350/Ahd/2021 A.Y. 2018-19 & 2019-20 Page No. 5
Neelkanth Developers vs. Asst. Director of Income Tax
our considered view, in the instant case, if the income has been offered by
the assessee by following the percentage completion method, in the current
year or in any of the earlier years, while TDS has been deducted
subsequently by the buyer/purchase at the time of execution of sale deed and
the assessee is able to produce the requisite certificates to substantiate that
TDS has been deducted on the income which has been offered to tax by the
assessee either in the current/earlier years (since income is being offered to
tax following the percent completion method while TDS was deducted at the
time of education of sale deed, the income presumably would be offered to
tax either in the same year or in any of the earlier years) and the assessee is
able to correlate the income offered to tax with the TDS deducted, the
assessee is eligible for credit of TDS. In the case of Supreme Renewable
Energy Ltd.[2010] 124 ITD 394 (Chennai), ITAT held that when a
particular income is received by assessee after deduction of tax at source and
said TDS has been duly deposited with Government and assessee has
received requisite certificate to this effect, then on production of said
certificate assessee becomes entitled to credit of TDS, even if assessee has
not directly offered said income for tax as assessee considers that same is not
liable for tax. In the case of Zelan Projects (P.) Ltd.[2015] 63
taxmann.com 334 (Hyderabad - Trib.), the ITAT held that where TDS
was deducted from mobilisation advance paid to assessee-erection
contractor, credit of same was to be allowed, even if no income was
assessable to tax as contract was not fully executed in relevant year. In the
case of Abbott Agency, Ludhiana, [2014] 41 taxmann.com 404 (Punjab
& Haryana), the High Court held that where relevant income had been
accounted in earlier assessment year but TDS certificate was issued late in
I.T.A Nos. 349 & 350/Ahd/2021 A.Y. 2018-19 & 2019-20 Page No. 7
Neelkanth Developers vs. Asst. Director of Income Tax
subsequent year, credit for TDS would be allowed in subsequent year. In the
case of NCC Maytas JV v. ACIT [A.Y. 2006-07, ITA No. 812 (Hyd.) of
2013, dated 13-9-2013, the ITAT held that a part of TDS cannot be denied
on the ground that the corresponding turnover has not been shown in the
A.Y. in which credit is being claimed, if income relating to such TDS has
already been offered for taxation in an earlier assessment year. In the instant
facts, in view of the aforesaid rulings, if the assessee has offered income to
tax in either in the current year or any earlier year and TDS has been
deducted on the same in the current year at the time of execution of sale
deed, credit for the TDS so deducted should be allowed to the assessee in the
current year, subject to the assessee producing the necessary supportingto
show that corresponding income has been offered in tax either during the
current year or any of the earlier previous years. In the instant facts, the
buyer/purchase of property deducted tax only at the time of execution of sale
deed, while the corresponding income has been offered to tax by the
assessee either during the current year or in any of the prior years by the
assessee following the percentage completion method. Accordingly, in the
above facts, the matter is being restored to the file of AO to carry out the
necessary verification in respect of income offered to tax and the
corresponding TDS for which credit is being claimed and TDS credit may be
allowed after carrying out the necessary verification in the year when TDS
has been deducted- subject to the assessee producing the correlation that
such income has been offered to tax either during the current year or any of
the earlier previous years.
I.T.A Nos. 349 & 350/Ahd/2021 A.Y. 2018-19 & 2019-20 Page No. 8
Neelkanth Developers vs. Asst. Director of Income Tax
6. Since the issue for consideration for both the years under
consideration i.e. assessment year 2018-19 and 2019-20 are the same, the
observations for assessment year 2018-19 would apply to assessment year
2019-20 as well.
8. In the combined result, both the appeals of the assessee are allowed
for statistical purposes.
Sd/- Sd/-
(WASEEM AHMED) (SIDDHARTHA NAUTIYAL)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad : Dated 27/12/2022
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
I.T.A Nos. 349 & 350/Ahd/2021 A.Y. 2018-19 & 2019-20 Page No. 9
Neelkanth Developers vs. Asst. Director of Income Tax
By order/आदे श से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण,
अहमदाबाद