The Chennai bench of the Income Tax Appellate Trinbunal (ITAT) held that the credit of advance tax and TDS credit would be allowable to the assessee and those entities have not claimed the credit thereof.
The assessee submitted that the shortfall in deduction under Section 10AA of the Income-tax Act, 1961 amounting to INR 293,57,39,088 in the assessment order is merely an arithmetical / system error and there is no basis for such disallowance of deduction under Section 10AA of the Income Tax Act.
The grievance of the assessee is two folds i.e., (i) Short grant of deduction under Section 10AA; (ii) Short grant of Advance tax and TDS belonging to amalgamated entities.
During appellate proceedings, a remand report was sought from AO on the issue of quantum of deduction under section 10AA. The findings of the same have been rendered in the order. Considering the same, CIT(A) had directed the AO to re-compute the deduction under Section 10AA of the Income Tax Act and allow such deduction as per law. Still aggrieved, the assessee appealed before the tribunal.
From the submissions of AO, it was quite clear that this deduction is fully allowable to the assessee. In fact, full deduction was allowed under section 143(1) and AO has not disputed this deduction while framing assessment under Section 143(3) of the Income Tax Act. Therefore, the tribunal modified the impugned order and held that full deduction would be allowable to the assessee. The AO was directed to re-compute the income of the assessee.
It was submitted by the AR that few of the entities got amalgamated with the assessee. The income of those entities was offered to tax by the assessee. Therefore, the credit of advance tax and TDS credit belonging to those entities would be allowable to the assessee and those entities have not claimed the credit thereof. The AR further submitted that the details of the same would not be reflected in Form 26AS of the assessee.
Considering the plea of the Authorised Representative for the assessee, the two member bench consisting of V. Durga Rao (Judicial member) and Manoj Kumar Aggarwal (Accountant member) directed the AO to verify assessee’s claim as per the submissions made by AR and allow the credit thereof as per law. Thus the appeal was allowed.
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