Vijay Kishore Doddavaram, Bengaluru V. ACIT-Circle-5(3)(2), Bangalore

ITA 1070/BANG/2022

AI Insights

The case involves appeals by Sri. Vijay Kishore Doddavaram against the orders of the CIT(A) which denied the Foreign Tax Credit (FTC) for the assessment years 2017-2018 and 2018-2019. The assessee, employed with Texas Instruments (India) Private Limited, had claimed FTC for taxes withheld on dividend income received from a foreign company in the USA. The CIT(A) had denied the FTC on the grounds that the documents submitted did not comply with Rule 128(8)(ii) of the Income Tax Rules. The Tribunal, however, found that the documents submitted, including Form 67 and form 1042S, were in compliance with the requirements and directed the grant of FTC.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115218 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 22-11-2022
• Laws Referred To: Income Tax Act, I.T.Rules
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “B”, BANGALORE Before Shri George George K, JM & Shri Girish Agrawal, AM ITA No.1070/Bang/2022 : Asst.Year 2017-2018 ITA No.1071/Bang/2022 : Asst.Year 2018-2019 Sri.Vijay Kishore Doddavaram C-503, Mantri Classic, ST Bed Layout, Koramangala 4 th Block Bengaluru – 560 034. PAN : AGWPD4334N. v. ACIT Circle-5(3)(2) Bangaluru (Appellant) (Respondent) Appellant by : Sri.Navaneeth N.Kini, CA Respondent by : Sri.Gudimella VP Pavan Kumar, JCIT-DR Date of Hearing : 24.01.2023 Date of Pronouncement : 27 .01.2023 O R D E R Per George George K, JM : These appeals at the instance of the assessee are directed against two orders of the CIT(A), both dated 23.09.2022. The relevant assessment years are 2017-2018 and 2018-2019. 2. The solitary issue raised in these appeals is whether the CIT(A) is justified in confirming denial of Foreign Tax Credit (FTC). 3. The brief facts of the case are as follows: The assessee is an individual employed with Texas Instruments (India) Private Limited. For the assessment years 2017-2018 and 2018-2019, the returns of income were filed ITA Nos.1070-1071/Bang/2022. Sri.Vijay Kishore Doddavaram. 2 claiming Foreign Tax Credit (FTC) of Rs.45,752 and Rs.51,437, respectively. The assessee received intimations u/s 143(1) of the I.T.Act, denying the benefit of FTC. 4. Aggrieved, the assessee filed appeals before the first appellate authority. The CIT(A) denied the benefit of FTC by observing that the documents submitted along with Form No.67 does not fall in any of the category of documents listed in Rule 128(8)(ii) of the I.T.Rules. 5. Aggrieved, the assessee has filed the present appeals before the Tribunal, for assessment years 2017-2018 and 2018-2019. In its grounds it is submitted that no opportunity was given to establish as to how the documents fit into the Rule 128(8)(ii) of the I.T.Rules. It is submitted that Form 67 had a statement of dividend income and tax withheld thereon and the same complies with the requirement of Rule 128(8)(ii). It was further submitted that form 1042S (equivalent to TDS under the US Tax Laws) issued by UBS Financial Services Inc., fits into the requirement of Rule 128(8)(ii)(b) of the I.T.Rules. 6. The learned Departmental Representative supported the orders of the CIT(A). 7. We have heard rival submissions and perused the material on record. During the assessment year 2017-2018, the assessee had received dividend income from foreign company in USA of Rs.1,84,004 and tax of Rs.45,752 (at the ITA Nos.1070-1071/Bang/2022. Sri.Vijay Kishore Doddavaram. 3 rate of 25%) was withheld in USA on said income. Similarly, for assessment year 2018-2019, the assessee received dividend income of Rs.2,05,748 and tax of Rs.51,437 was withheld. The assessee admittedly had filed Form 67 for both the assessment years 2017-2018 and 2018-2019. The sole reason for denying the benefit of FTC was that documents submitted along with Form 67 does not comply with Rule 128(8)(ii) of the I.T.Rules. The Form 67 furnished by the assessee had a statement of dividend income and taxes withheld thereon and it fits into requirement of Rule 128(8)(i). Further, the assessee had also submitted form 1042S (TDS certificate under US Tax Laws), issued by USB Financial Services Inc., which fits into the documents that is prescribed under Rule 128(8)(ii)(b) of the I.T.Rules. Since the assessee had filed Form 67 and sufficiently complied with Rule 128(8), we direct the A.O. to grant the foreign tax credit of Rs.45,752 for assessment year 2017-2018 and Rs.51,437 for assessment year 2018-2019. It is ordered accordingly. 8. In the result, the appeals filed by the assessee are allowed. Order pronounced on this 27 th day of January, 2023. Sd/- (Girish Agrawal) Sd/- (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore; Dated : 27 th January, 2023. Devadas G* ITA Nos.1070-1071/Bang/2022. Sri.Vijay Kishore Doddavaram. 4 Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)-NFAC Delhi 4. The Pr.CIT, Bengaluru. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore