INCOME TAX ACT, 1961

Section 199

Tax deduction at source - TDS credit - Allowability in whose hands - Director received commission belonging to assessee-company--Commission income taxed as assessee's income

One 'S' being director of assessee-company received additional commission from IFFCO Tokyo General Insurance Co. Ltd. on behalf of assessee and TDS was also deducted by said company . Both these amount additional incentives and TDS was reflected in Form No. 26AS of 'S'. However, commission belonged to assessee company and accordingly same was included in return of income of assessee and corresponding TDS was also claimed. AO while processing the return under section 143(1) denied credit of TDS whereas income was duly included and assessed in the hands of assessee. Held: It was quite clear that TDS was neither allowed credit in the hands of director 'S' nor the assessee whereas income was assessed in the hands of assessee, which was grossly unfair despite the fact that AO of director had communicated to AO of assessee that credit of TDS had not been allowed to director and same could be allowed to assessee-company. Accordingly, denial of TDS credit to assessee was not justified.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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