Case is As below: X Co. claimed TDS deducted in its ROI on basis of credit given by the government as indicated in 26AS online. However, the deductor Y co. hadnt deducted any TDS amount or issued any TDS certificate to X & CO. Now X n CO. is revising its return. Should it take credit of that TDS Amount or not?
02 June 2010
If the company has done some work for Y and income has been received by X then TDS should be claimed as the TDS claim is backed by income shown in the same year.
02 June 2010
If no income has been shown then please do not claim that TDS as TDS claim should be backed by Income as per Section 199. It is a case where wrong PAN has been mentioned by Y while deducting TDS of some other person. So this could lead to same TDS being claimed by two persons. One i. e. you and other the person whose actual TDS has been deducted though credit is not standing in his name. So do not claim that TDS.
02 June 2010
dear Mr. Aditya.. Section 199 only applies to cases where deduction has been made from payment.. In my Query, Y co. has mistakely deposited the TDS amt. but not deducted from X CO. as no payment is made to X co. actually.. the case is First X co. booked income in its books then reversed it as Y co. refused to contract. then Y co. didnt made payment to X co. but deposited the amt of tds on the same amount without deducting from X co. So now in 26 AS , credit of tds is showing.. SO last year X co. taken TDS credit in ROI of the same..
Department also given credit in intimation u/s 143(1) of the same..
Now X co is revising return..so should X co. Take credit of the same TDS amt this time or not?
02 June 2010
See section 199 read with rule 37BA reads as 3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.
(ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.
If the number of TDS certificates are large then the TDS claim might not come into the eyes of the A. O. if the assessment is going on and still claim the same.
If the same is less then the TDS claim should be reversed in my view.
CAclubindia
