Income Tax Appellate Tribunal (ITAT), Raipur bench consisting of Ravish Sood, Judicial Member and Jamlappa D Battull, Accountant Member held that interest expenditure incurred by assessee qua the borrowed funds which were utilized by it for acquiring machinery in the course of business allowable as deduction u/s.37(1) of the Act.
The assessee firm, M/s. B.B. Verma which is engaged in the business of a contractor had filed its original return of income for the assessment year 2011-12 on 30.09.2011, declaring an income of Rs.85,46,970/-. The return of income filed by the assessee was processed as such u/s.143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. The Assessing Officer (AO) made certain additions to the income, aggrieved by the order of AO the assessee approached the ITAT.
The Tribunal observed”Where tax is deducted at source and paid to the Central Government over a number of years, then, credit for TDS shall be allowed across those years in the same proportion in which the income is assessable to tax. Backed by the aforesaid position of law, we are of the considered view that no infirmity emerges from the orders of the lower authorities who have rightly restricted the assessee’s claim for credit of TDS to the extent of the sum that was relatable to the corresponding income/receipt that was accounted for in its income for the year under consideration. The claim of the assessee for credit of remaining amount of TDS is to be allowed in its hands on pro-rata basis in the respective years, in which, the same is offered as its income.”
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