IN INCOME TAX APPELLATE TRIBUNAL BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER . I.T.A. No.7019 Mum 2014 ( Assessment Year : 2012-13) Mr. Anish Kapu rchand ACIT (CPC) , Bengaluru Chandaria, Unit No. 1202 v. 12 t h Floor, Towe r B Peninsula Corporate Park G K Marg, Lowe r Parel(W) Mumbai-400013 . PAN : AMNPC1428K ( Appellant) .. ( Respondent) Assessee by Shri P B Chhapgar Revenue by : Shri . Ramachandran Date of Hearing : 22-6-2016 Date of Pronouncement : 15-09-2016 ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by assessee , being ITA No. 7019 Mum 2014, is directed against appellate order dated 31st July, 2014 passed by learned Commissioner of Income Tax (Appeals)- 10, Mumbai (hereinafter called CIT(A) ), for assessment year 2012-13, appellate proceedings before learned CIT(A) arising from assessment order dated 30th April , 2014 passed by learned Assessing Officer (hereinafter called AO ) u s 154 of Income Tax Act,1961 (Hereinafter called Act ). 2 ITA 7019 Mum 2014 2. assessee is aggrieved in this appeal by non credit of tax deducted at source under Chapter XVII-B of Act with respect and in proportion to income offered for taxation in accordance with provisions of Section 199 of Act of 1961 read with Rule 37BA of Income Tax Rules, 1962. It is say of assessee that assessee earned commission income of Rs.1,42,89,500 - from Aegis Logistics Limited for assessment year 2012- 13 on which tax was deducted at source u s 195 of Act falling under Chapter XVII-B of Act of Rs.44,15,455 - for which TDS credit has not been given by Revenue on pretext that deductor has credited said sum of amount of commission in its books of accounts to credit of assessee for previous year ended 31-03-2011 i.e. assessment year 2011-12 , which commission was subject to approval of shareholders of deductor company namely Aegis Logistics Limited which was approved by shareholders of Aegis Logistics Limited only in previous year 2011-12 relevant to assessment year 2012-13 and hence assessee has rightly offered said commission income of Rs.1,42,89,500 - correctly in return of income filed for assessment year 2012-13 and correctly claimed credit of tax deducted at source of Rs. 44,15,455 - u s. 195 of Act falling under Chapter XVII-B of Act for assessment year 2012-13 relying on provisions of Section 199 of Act of 1961 read with Rule 37BA of Income Tax Rules, 1962. Similarly, it is also say of assessee that commission income of Rs.1,20,00,000 - earned by assessee on which tax was deducted at source of Rs. 37,08,000 -under Chapter XVII-B of Act was offered to tax in assessment year 2013-14 while deductor credited said commission to credit of assesseee in its books of accounts on 31-03-2012 but which was again subject to approval of shareholders of deductor company which approval of shareholder was obtained by deductor company only in previous year 2012-13 relevant to assessment year 2013-14 and hence assessee has rightly accounted for said 3 ITA 7019 Mum 2014 commission income of Rs.1,20,00,000 - and corresponding TDS credit of Rs.37,08,000 - in its return of income for assessment year 2013-14 relying upon provisions of Section 199 of Act read with Rule 37BA of Income Tax Rules, 1962. There was further grievance of assessee with respect to denial on part of revenue in granting credit of TDS of Rs 2790 - to assessee. It is say of assessee that assessee income tax return was processed by CPC, Bangalore vide communication Reference no. CPC 1213 P1 1223920339 u s. 143(1) of Act whereby demand was raised by Revenue of Rs. 6,62,110 - as payable inclusive of interest payable under provisions of Act issued by learned Assistant Commissioner of Income Tax(CPC) (Hereinafter called ACIT(CPC)) . demand had arisen as learned ACIT(CPC) has granted credit for TDS of only Rs. 37,08,000 - ( which TDS credit in fact was claimed by assessee for succeeding assessment year i.e. 2013-14) as against claim of TDS credit of Rs. 44,15,455 - made by assessee. It is say of assessee that ACIT(CPC) erred in giving credit of TDS of Rs.37,08,000 - which pertained to assessment year 2013-14 and also erred in denying credit of TDS of Rs. 44,15,455 - pertaining to instant assessment year 2012-13 against which income of Rs.1,42,98,517 - has been offered for taxation in instant assessment year 2012-13 on which TDS of Rs.44,15,455 - had been deducted at source by deductor company Aegis Logistics Limited. assessee moved application u s. 154 of Act with ACIT(CPC) on 12-02- 2014 but without success , of which rejection was communicated to assessee vide Communication Reference no. CPC 1213 T1 1327516022 dated 30-04-2014 by ACIT(CPC). 3.The assessee carried matter further by filing first appeal with learned CIT(A) who rejected contentions of assessee vide appellate order dated 31-07-2014 by holding that perusal of 26AS certificate reveals that transaction of commission of Rs.1,42,98,517 - was reported by deductor 4 ITA 7019 Mum 2014 company Aegis Logistics Limited to Revenue as on 31-03-2011 whereby tax was deducted at source under Chapter XVII-B u s 195 of Act for assessment year 2011-12 of Rs. 44,15,455 - and hence income was to be reported by assessee for assessment year 2011-12 and not for assessment year 2012-13 as reported by assessee.It was held by learned CIT(A) that AO has correctly given credit for tax deducted at source of Rs.37,08,000 - , however directions were issued by learned CIT(A) to bring to tax income of assessee in correct assessment year, vide appellate orders dated 31-07-2014. 4. assessee filed second appeal with Tribunal against appellate order dated 31-07-2014 passed by learned CIT(A). learned counsel for assessee reiterated submissions as were made before authorities below which are set out in preceding para s of this order and are not repeated. learned counsel placed reliance on Section 199 of Act of 1961 read with Rule 37BA of Income Tax Rules, 1962 and prayed that appropriate relief may be granted to assessee as assessee has correctly filed his return of income with Revenue on which proper credit for tax deducted at source was claimed by assessee in accordance with provisions of Section 199 of Act read with Rule 37BA of Income Tax Rules, 1962. learned DR relied upon orders of learned CIT(A). 5. We have considered rival contentions and perused material on record. We have observed that assessee has offered for taxation commission income of Rs. 1,42,98,518 - for assessment year 2012-13 on which tax is stated to have been deducted at source of Rs. 44,15,455 - which is claimed by assessee in return of income filed with Revenue. said commission income was credited to account of assessee by deductor Aegis Logistics Limited as at 31-03-2011 and tax was stated to have been deducted at source by deductor u s. 195 of Act amounting to 5 ITA 7019 Mum 2014 Rs. 44,15,455 - which was reported to Revenue to be pertaining to assessment year 2011-12 while said commission was stated to be subject to approval of shareholders which approval was accorded by shareholders of Aegis Logistics Limited only in previous year 2011-12 and hence assessee accounted for income as well tax deducted at source thereon only in assessment year 2012-13 which claim of credit of tax deducted at source was denied to assessee in assessment year 2012-13 on ground that tax deducted at source pertained to assessment year 2011-12 while credit of tax deducted at source of Rs.37,08,000 - was granted to assessee which assessee stated to have claimed in assessment year 2013-14. assessee had placed reliance on Section 199 of Act of 1961 read with Rule 37BA of Income Tax Rules, 1962. contentions of assessee needs verification and we are setting aside and restoring this matter issue to file of learned AO ACIT(CPC) who shall verify all contentions of assessee as well as return of income filed for assessment years 2011-12 to 2013-14 to arrive at correct declaration of income and credit of tax deducted at source thereon in accordance with provisions of Act including relied upon provisions of Section 199 of Act read with Rule 37BA of Income Tax Rules, 1962, specifically Rule 37BA(3) of Income Tax Rules, 1962 . It will also be verified by learned AO ACIT(CPC) that there is no double credit of prepaid taxes claimed by assessee for these assessment years 2011-12 to 2013-14 and all income are duly accounted for by assessee and hence, thereafter, appropriate rectifications shall be carried out by AO ACIT(CPC) to ensure correct income is brought to tax as well correct credit of prepaid taxes are granted to assessee in accordance with mandate of Act. There is further grievance of assessee with respect to denial on part of Revenue in granting credit of TDS of Rs 2790 - to assessee which shall also be looked into by AO ACIT(CPC) in set aside proceedings. Needless to say that learned AO ACIT(CPC) shall grant proper and sufficient opportunity 6 ITA 7019 Mum 2014 of being heard to assessee in accordance with principles of natural justice in accordance with law. assessee will be allowed to file all necessary and relevant evidences and explanations in support of his contentions. We order accordingly. 6. In result, appeal filed by assessee in ITA No. 7019 Mum 2014 is allowed for statistical purposes. Order pronounced in open court on 15th September, 2016. 15-09-2016 Sd - sd - (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 15-09-2016 R.K., Ex. Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- concerned, Mumbai 4. CIT- Concerned, Mumbai 5. , , DR, ITAT, Mumbai Bench 6. Guard file. BY ORDER, True Copy (Dy. Asstt. Registrar) , ITAT, Mumbai Anish Kapurchand Chandaria v. ACIT – (CPC) , Bengaluru