Addition not justified merely on the basis of discrepancy in TDS certificate

The tribunal took the view that the addition made was only on the basis of the discrepancy in the TDS Certificate and not on the basis of any finding that some extra charges were received by the assessee, but had not been accounted for. The tribunal also held that when the issuer of the certificate had certified that the mistake had crept in due to the pre-fed computer-programme and certified that no other charges other than what was reflected in the books of accounts of the assessee had been paid to the assessee, the addition was not justified.

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Credit is to be allowed in respect of TDS made on higher amount of reimbursement than actually offered to tax

Undisputedly, the assessee company earned income of Rs. 4,65,00,000/- only by way of Engineering fees. Another amount of Rs 4,65,00,000/- had been received as tooling advance. This latter amount was to be paid to the vendors of M/s. Mahindra and Mahindra Ltd. This payment was a reimbursement. That being so, it could not be considered as the income of the assessee company. It was by sheer mistake that M/s. Mahindra and Mahindra Ltd. has deducted TDS on the whole amount of Rs 9,30,00,000/-. The TDS amount was thus in excess of the assessable tax on the payment made by M/s. Mahindra and Mahindra Ltd. to the assessee company. This had to be refunded, as held by the Hon’ble Supreme Court in the case of Sandvik India LTd. v. CIT 280 ITR 643(SC). This position has duly been considered and rightly so, by the ld. CIT(A) in the impugned order. If wrong tax has been paid, it is of  necessity to be returned, lest the department be charged of unjust enrichment.

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No addition for difference in income as per profit and loss account & TDS certificate

Admittedly, as per TDS certificate issued by Mysore Breweries Limited, the total reimbursement made to the assessee as per their newly arrangement was Rs. 3,35,85,000/-. However, in the books of assessee, it was only Rs. 2,54,97,000/-. The assessee had explained that a credit note of Rs. 80,88,000/- issued by it in favour of Mysore Breweries Limited was not accounted for by them and, therefore, by this amount they had shown higher reimbursement to assessee. The contention of the assessee was that it was a case of clerical error committed by subsidiary Mysore Breweries Limited which was duly confirmed by Mysore Breweries Limited.

The assessee relied on the decision of Hon’ble Delhi High Court in the Case of Sudhir Sekhri vs. ACIT (Delhi HC) , wherein it was, inter-alia, held that where the issuer of the certificate had certified that the mistake had crept in due to the pre-fed computer programme and certified that no other charges other than what was reflected in the books of account of the assessee had been paid to the assessee, the addition was not justified merely on the basis of discrepancy in the TDS certificate and amount recorded in the books of account.

Under such circumstances, we find that the decision of Hon’ble Delhi High Court in the case of Sudhir Sekhri (supra) is squarely applicable to the facts of the case and, therefore, the addition of Rs. 80,88,000/- was wholly unwarranted.

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TDS/TCS Compliances for 3rd Quarter of F.Y. 2012-13

      7 Comments on TDS/TCS Compliances for 3rd Quarter of F.Y. 2012-13

TDS (Tax Deducted at Source) is one of the modes of collectingincome tax from the assessees in India. This is governed under Indian Income Tax Act, 1961, by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS), Ministry of Finance, Govt. of India.

In simple terms, TDS is the amount of tax getting deducted from the person (Employee / Deductee) by the person paying (Employer/Deductor).

It is very important to file TDS returns on time because late filing can result in paying late filing fees according to Section 234E

Mandatory Fees and Penal provisions:

Therefore, file your TDS returns properly and on time to avoid penalty for late filing of TDS returns.

TDS/TCS Compliances for 3rd Quarter of F.Y. 2012-13

  • Last date for payment of tax deductions/collections for December 2012 – 7th January, 2013
  • Last date of filing of TDS/TCS returns for Q3 of F.Y. 2012-13 – 15th January, 2013
  • Last date for issuance of the TDS/TCS certificates for Q3 – 30th January, 2013

It is recommended to use TDSMAN software for filing TDS and TCS returns as per TIN Nsdl format. This TDS software enables eTDS & eTCS return generation of all types of forms – 24Q, 26Q, 27Q, 27EQ & also prints TDS certificate – form 16, form 16A.

Some of its features are:

  • Supports unlimited deductors / companies, deductees, employees
  • Preparation of eTDS & eTCS returns for Forms 24Q, 26Q, 27Q, 27EQ
  • Auto-generation of Form 16, 16A, 27A, 27B, 27D
  • Printing of TDS, TCS certificates – 16, 16A, 27D
  • Interface for online requests to TIN
  • In-built utility for Import / Export of data from MS-Excel
  • Option of importing / retrieving data from Consolidated files
  • Data backup and restore facility
  • integrated File Validation Utility (FVU)
  • Generation & printing of various types of customized utility reports
  • Report generation in PDF formats
  • Online updates
  • Challan verification

Use the TDSMAN Software (FY: 2012-13) for easy filing of your fourth quarter eTDS / eTCS returns. TDSMAN (FY: 2012-13) is priced at Rs. 2500/– only and covers the financial year 2012-13 and all earlier years till 2005-06. During the course of the year, all statutory updates & changes in the software will be provided to you for free.  Click here to order now

To download free trial of TDSMAN software click here

To watch video demo of  TDSMAN software  click here

To place an order for TDSMAN software  click here

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