S.B. Patel JV Laxmi Construction Vs A.C.I.T. (ITAT Ahmd. ITA No. 418/AHD/2022)

The assessee had shown advance of Rs.3.50 crores in the year in respect of which TDS was deducted by the corresponding party. Certainly, the assessee is not eligible of the amount of TDS deducted on the amount of advance received by the assessee as the corresponding income was not offered to tax.

The next controversy arises when the assessee can claim the benefit of TDS i.e., the year in which it offers corresponding income in the income tax return.

The advance money was shown as income in the Financial Year 2016-17 corresponding to 2017-18 by the assessee. In this regard, the Court noted as per the Act that 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. The Court ordered that the assessee should be allowed the benefit of TDS credit in the AY 2017-18 subject to the verification.

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