The Income Tax Appellate Tribunal (ITAT), Mumbai Bench comprises of Rahul Chaudhary, Judicial Member, and Om Prakash Kant, Accountant Member ruled that supporting evidence is mandatory for claiming TDS Credit in lack of a TDS Certificate.
The taxpayer DZ bank provides the loans to the Indian borrowers and obtains the payments, via its Indian borrowers for the interest on the amounts that have been borrowed, post to the TDS deductions.
The Assessing Officer does not permit the TDS towards which the taxpayer has not filed the TDS certificates. The Indian borrowers would file the interest income post to deducting tax at the source as per Article 11 of the Double Taxation Avoidance Agreement (DTAA) between India and Germany.
The Counsel for the taxpayer, P.J. Pardiwala/Jeet Kamdar, mentioned, that he only obtain the net amount i.e post to the TDS deductions. Hence TDS credit should get permitted to the taxpayer along with the items for which the taxpayer can not file the TDS certificates.
The Counsel for the Revenue Somendu Kumar Dash specified, that the taxpayer would not submit any proof, the tax was deducted through the payer of income and the problem might get corrected to the file of the assessing officer towards permitting the TDS credit to the taxpayer as per the law post verification if the income payer would get deducted the tax at source or not.
The things that Tribunal revealed that “The assessee has even neither furnished any details of the amount of TDS in respect of interest income, which it has shown if any in its profit and loss account nor furnished any evidence to support the deduction of tax at source by the payer of income. The assessee has not furnished any certified copies of the ledger account of the assessee in the books of borrower parties so as to reflect the amount credited in the account of the assessee.
In the background of the above facts and circumstances, statutory provisions, and judicial precedents, we feel it appropriate to restore this issue of granting credit of tax deducted source to the file of the Assessing Officer for verification as to whether the assessee has shown interest income corresponding to the TDS in profit and loss account for the year under consideration and whether the tax has been deducted at source by the payer of the income.”