The Earnings Tax Appellate Tribunal ( ITAT ) Bangalore bench presided by Mr N. V. Vasudevan, Vice President has directed Assessing Officer to look at the result of an software for switch of licence for the reason that assessee shouldn’t be a licence holder to say Tax Assortment at Supply (TCS) in Earnings Tax
The appellate, Mr Jayaprakasha Rai, is the proprietor of M/s. Prashanth Wines, engaged within the retail enterprise of Indian Made International Liquor (IMFL) utilizing the excise licence within the identify of Mrs Pramila P Rai, daughter-in-law of the assessee’s brother. All of the purchases of IMFL had been comprised of Karnataka State Drinks Company Ltd., (KSBCL) by the assessee utilizing the excise licence of Mrs Pramila P. Rai.
In the course of the course of buy, KSBCL made Tax Assortment at Supply (TCS) of Rs.1,39,296/- underneath part 206C of the Earnings Tax Act, 1961. Thereafter, the assessee claimed credit score for TCS within the return of earnings and the declare was rejected by the AO in addition to the CIT(A) given that the credit score may be given solely to Mrs Pramila Rai and never the Assessee. The aggrieved assessee filed an enchantment earlier than ITAT.
The counsel for the assessee submitted that the request for switch of the licence from Mrs Pramila P. Rai to the assessee, has already been made to the Central Excise Authorities and the stated request is pending consideration. The aim of the provisions of part 206 C (4) in addition to Rule 37-I of the Earnings Tax Guidelines, 1962 are meant to make sure that credit score for TCS of the identical sum shouldn’t be claimed by two individuals and Mrs Pramila P. Rai in addition to the assessee are assessed by the identical AO and if the licence is finally transferred within the identify of the assessee, the assessee can be lawfully entitled to say credit score for TCS.
The Tribunal has held that “the difficulty requires to be put aside to the AO for examination afresh within the gentle of the result earlier than the Central Excise authorities for the switch of excise licence from Mrs Pramila P. Rai to the assessee. I’m additionally of the view that the AO can take needed safeguards to make sure that the curiosity of the Income shouldn’t be affected or prejudiced in any method”.
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Shri. Jayaprakasha Rai vs DCIT
Counsel for Appellant: Shri. Srinivas Kamath
Counsel for Respondent: Shri. Ganesh R Ghale
CITATION: 2022 TAXSCAN (ITAT) 805