HCL Comnet Ltd., New Delhi V. DCIT, New Delhi

ITA 1113/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6956 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; TDS; Rule 8D; Set aside
• Section: 14A; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1113/DEL./2017 (ASSESSMENT YEAR : 2012-13) M/S. HCL COMNET LIMITED, VS. DCIT, CIRCLE 11 (1), 806, SIDHARTH, NEW DELHI. 96, NEHRU PLACE, NEW DELHI. (PAN : AAACH9667H) (APPELLANT) (RESPONDENT) DATE OF HEARING : 20.02.2020 ASSESSEE BY : SHRI AJAY VOHRA, SENIOR ADVOCATE SHRI ADITYA VOHRA, ADVOCATE SHRI ARPIT GOYAL, CA REVENUE BY : SHRI S.N. MEENA, SENIOR DR CLARIFICATION DATE OF HEARING : 04.09.2020 ASSESSEE BY : SHRI AJAY VOHRA, SENIOR ADVOCATE SHRI ADITYA VOHRA, ADVOCATE SHRI ARPIT GOYAL, CA REVENUE BY : SHRI M. BARNWAL, SENIOR DR DATE OF ORDER : 04.09.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. HCL COMNET LIMITED (HEREINAFTER RE FERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 14.03.2017 PASSED BY THE L EARNED ITA NO.1113/DEL./2017 2 COMMISSIONER OF INCOME-TAX (APPEALS)-18, NEW DELI Q UA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT :- 1. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN UPHOLDING ADDITION OF RS.21,23,629 MA DE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE INCOME TAX ACT, 19 61 (THE ACT) READ WITH RULE 8D(2)(III) OF THE INCOME-TAX RULES, 1962 (THE RULES) NOT APPRECIATING THAT EXPENSES INCURRED FOR EARNING THE TAX FREE INCOME WERE ALREADY DISALLOWED BY THE APPELLANT. 1.1 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN NOT HOLDING THAT NO DISALLOWANCE COUL D BE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT WITH OUT RECORDING SATISFACTION/RECALLING FINDING AS TO NEXUS OF ANY E XPENDITURE INCURRED DURING THE YEAR WITH INVESTMENTS MADE OR EXEMPT INC OME EARNED. 1.2 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN NOT HOLDING THAT THE INVESTMENTS ON W HICH NO EXEMPT INCOME WAS EARNED WERE NOT REQUIRED TO BE TAKEN INT O ACCOUNT FOR COMPUTING DISALLOWANCE AS PER FORMULA PRESCRIBED UN DER SUB-RULE (2)(III) OF RULE 8D OF THE RULES. 2. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ER RED ON FACTS AND IN LAW IN UPHOLDING ADDITION OF RS.2,48,71,145 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CREDIT OF TAX DEDUC TED AT SOURCE (TDS) ON DEFERRED REVENUE, WITHOUT APPRECIATING T HAT IT WAS ONLY A CASE OF TIMING DIFFERENCE AND NO LOSS TO THE REVENU E AROSE ON ACCOUNT OF SAID APPROACH FOLLOWED BY THE APPELLANT. 3. WITHOUT PREJUDICE, THAT THE COMMISSIONER OF INCO ME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN DISALLOWING CREDIT OF ENTIRE AMOUNT OF TDS AMOUNTING TO RS.2,48,71,145 RELATED T O DEFERRED REVENUE AND IN NOT ALLOWING CREDIT OF TDS ON PROPOR TIONATE BASIS, AS SPECIFIED UNDER RULE 37BA (3)(II) OF THE RULES.' 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INTO THE BUSI NESS OF TRADING OF NETWORKING EQUIPMENTS, INSTALLATION AND MAINTENANCE OF SUCH EQUIPMENTS AND CREATION, MAINTENANCE AND OPERATION OF NETWORKS. ASSESSING OFFICER (AO) NOTICED THE INVESTMENT OF RS.54,55,93,586/- MADE BY THE ASSESSEE IN THE SHARE S IN MUTUAL FUNDS AND THEREBY EARNED THE DIVIDEND INCOME OF RS. 6,07,08,212/- ITA NO.1113/DEL./2017 3 AND CLAIMED THE SAME EXEMPT FROM TAXATION. AO BY IN VOKING THE PROVISIONS CONTAINED UNDER SECTION 14A OF THE INCOM E-TAX ACT, 1961 (FOR SHORT THE ACT) READ WITH RULE 8D OF THE INCOME-TAX RULES, 1962 ( FOR SHORT THE RULES) AND BY RELYING UPON THE CIRCULAR NO.5 OF 2014 DATED 11.02.2014 ISSUED BY CENTRAL BOA RD OF DIRECT TAXES (CBDT) PROCEEDED TO MAKE DISALLOWANCE UNDER S ECTION 14A READ WITH RULE 8D (3) TO THE TUNE OF RS.24,70,095/- . 3. AO ALSO MADE ADDITION OF RS.2,48,71,145/- ON ACC OUNT OF CREDIT OF TAX DEDUCTED AT SOURCE ON DEFERRED REVENU E ON THE GROUND THAT THE SAME WILL BE ALLOWED IN THE RELEVANT ASSES SMENT YEAR IN WHICH UNDERLYING REVENUE HAS BEEN OFFERED TO TAX. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY FILING THE APPEAL WHO HAS PARTLY ALLOWED THE APPEAL. FEEL ING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.A WE HAVE HEARD LD. AR FOR THE ASSESSEE AS WELL A S LD. DR FOR THE REVENUE ON CLARIFICATION WHO HAVE EXPLAINED THE QUERIES PUT FORTH BY THE BENCH. ITA NO.1113/DEL./2017 4 GROUND NOS.1, 1.1 & 1.2 6. UNDISPUTEDLY, ASSESSEE COMPANY HAS MADE INVESTME NT OF RS.54,55,93,586/- IN THE SHARES AND MUTUAL FUNDS AN D EARNED DIVIDEND INCOME OF RS.6,07,08,212/- ON THE SAME. I T IS ALSO NOT IN DISPUTE THAT THE ASSESSEE COMPANY HAS SUO MOTO MADE DISALLOWANCE OF RS.3,46,466/- IN ORDER TO EARN THE DIVIDEND INCO ME. IT IS ALSO NOT IN DISPUTE THAT NO INTEREST COST HAS BEEN ATTRIBUTE D TO THE INVESTMENT IN QUESTION AS THE SAME HAS BEEN FUNDED OUT OF INTE REST FREE LOANS RECEIVED FROM ITS HOLDING COMPANY. IT IS ALSO NOT IN DISPUTE THAT THE ENTIRE INVESTMENTS IN QUESTION WERE MADE IN DEBT OR IENTED MUTUAL FUNDS. 7. WHEN WE EXAMINE THE IMPUGNED ORDER PASSED BY THE AO AS WELL AS LD. CIT (A), THEY HAVE HARPED UPON INBUILT COST INCURRED ON THE INVESTMENT IN QUESTION VIZ. INCIDENTAL EXPENDIT URE OF COLLECTION, TELEPHONE, FOLLOW-UP, ETC. BUT ASSESSEE COMPANY HAS COME UP WITH SPECIFIC WORKING THAT ON THE SPECIFIC INVESTMENT, I T HAS INCURRED EXPENSES TO THE TUNE OF RS.3,46,466/-. AO AS WELL AS LD. CIT (A) WITHOUT CALLING DETAIL AND EXPLANATION OF THE WORKI NG FOR MAKING SUO MOTO DISALLOWANCES PROCEEDED TO INVOKE THE PROV ISIONS CONTAINED UNDER SECTION 14A READ WITH RULE 8D. TH ERE IS NO VALID SATISFACTION RECORDED BY THE AO THAT WORKING FOR MA KING SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE COMPANY IS FAULTY RATHER ITA NO.1113/DEL./2017 5 PROCEEDED TO MAKE DISALLOWANCE UNDER RULE 8D 3 @ 0. 5% OF AVERAGE VALUE OF INVESTMENT. 8. HONBLE DELHI HIGH COURT IN THE IDENTICAL SITUAT ION IN THE CASE OF HT MEDIA LTD. VS. PR. CIT 199 ITR 576 (DEL.) HELD THAT RECORDING OF SATISFACTION BY THE AO BEFORE INVOKING PROVISIONS CONTAINED UNDER SECTION 14A READ WITH RULE 8D IS A SINE QUA NON. OPERATIVE PART OF THE AFORESAID JUDGMENT IS EXTRACT ED FOR READY PROPOSAL AS UNDER :- 30. RULE 8 D (1) STATES MORE OR LESS WHAT SECTION 14 A (2) OF THE ACT STATES. IT REQUIRES THE AO TO FIRST EXAMINE THE ACCOUNTS OF THE ASSESSEE AND THEN RECORD THAT HE IS NOT SATISFI ED WITH (A) THE CORRECTNESS OF THE ASSESSEE'S CLAIM OF EXPENDITURE OR (B) THE CLAIM MADE BY THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED. UNLESS THIS STAGE IS CROSSED I.E. THE STA GE OF THE AO RECORDING THAT HE IS NOT SATISFIED WITH THE CLAM OF THE ASSESSEE IN THE MANNER INDICATED I.E. AFTER EXAMINING THE ASSES SEE'S ACCOUNTS, THE QUESTION OF APPLYING THE FORMULA UNDE R RULE 8D (2) DOES NOT ARISE. THAT THIS IS A MANDATORY PRE-REQUIS ITE FOR APPLYING RULE 8D (2) IS FAIRLY WELL-SETTLED. 9. HONBLE SUPREME COURT IN CASE OF MAXOPP INVESTMENT LTD. VS. CIT 347 ITR 272 ALSO HELD THAT SATISFACTION OF THE AO IS MANDATORY THAT SUO MOTO DISALLOWANCE MADE UNDER SEC TION 14A WAS NOT CORRECT BY RETURNING FOLLOWING FINDINGS :- 41) HAVING REGARD TO THE LANGUAGE OF SECTION 14A( 2) OF THE ACT, READ WITH RULE 8D OF THE RULES, WE ALSO MAKE I T CLEAR THAT BEFORE APPLYING THE THEORY OF APPORTIONMENT, THE AO NEEDS TO RECORD SATISFACTION THAT HAVING REGARD TO THE KIND OF THE ASSESSEE, SUO MOTO DISALLOWANCE UNDER SECTION 14A WAS NOT COR RECT. IT WILL BE IN THOSE CASES WHERE THE ASSESSEE IN HIS RETURN HAS HIMSELF APPORTIONED BUT THE AO WAS NOT ACCEPTING THE SAID APPORTIONMENT. IN THAT EVENTUALITY, IT WILL HAVE TO RECORD ITS SATISFACTION TO THIS EFFECT. FURTHER, WHILE RECORDI NG SUCH A SATISFACTION, NATURE OF LOAN TAKEN BY THE ASSESSEE FOR PURCHASING ITA NO.1113/DEL./2017 6 THE SHARES/MAKING THE INVESTMENT IN SHARES IS TO BE EXAMINED BY THE AO. 10. FOLLOWING THE AFORESAID DECISIONS RENDERED BY T HE HONBLE SUPREME COURT AND HONBLE HIGH COURT OF DELHI, WE A RE OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE COMPANY, WIT H ITS AUDITED ACCOUNTS, HAVE COME UP WITH SPECIFIC COMPUTATION TH AT IN ORDER TO EARN THE DIVIDEND INCOME OF RS.6,07,08,212/- THEY H AVE INCURRED AMOUNT OF RS.3,46,466/- AND SUO MOTO DISALLOWED THE SAME, AO WAS NOT EMPOWERED TO INVOKE THE PROVISIONS CONTAINE D UNDER SECTION 14A READ WITH RULE 8D IN A MECHANICAL MANNE R WITHOUT RECORDING HIS SATISFACTION THAT WORKING GIVEN BY AS SESSEE COMPANY IS NOT CORRECT. 11. AO HAS MERELY RECORDED THAT, I AM NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE . NO REASONS AS TO HOW AND WHY HE HAS NOT GOT SATISFIED WITH THE CORRECTNE SS OF THE CLAIM OF THE ASSESSEE. SO, WE ARE OF THE CONSIDERED VIEW THAT AO AS WELL AS LD. CIT (A) HAVE ERRED IN MAKING/CONFIRMING FURT HER DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OV ER AND ABOVE THE DISALLOWANCE OF RS.3,46,466/- MADE BY THE ASSES SEE, HENCE DISALLOWANCE OF RS.21,23,629/- MADE BY THE AO AND C ONFIRMED BY THE LD. CIT (A) IS HEREBY ORDERED TO BE DELETED. S O, GROUNDS NO.1, 1.1 & 1.2 ARE ALLOWED. ITA NO.1113/DEL./2017 7 GROUND NOS.2 & 2.1 12. UNDISPUTEDLY, ASSESSEE COMPANY HAS MADE CLAIM O F TDS OF RS.2,48,71,145/- ON DEFERRED REVENUE OF RS.60,73,52 ,960/-. IT IS ALSO NOT IN DISPUTE THAT AO HAS NOT ONLY DISALLOWED THE TDS RELATING TO THE DEFERRED REVENUE BUT ALSO ADDED THE TDS SO DISALLOWED AS INCOME. 13. LD. AR FOR THE ASSESSEE BY RELYING UPON THE PRO VISIONS CONTAINED UNDER SECTION 199 (3) OF THE ACT AND RULE 37BA (3)(II) CONTENDED THAT WHEN THE TAX HAS BEEN DEDUCTED AT SO URCE AND PAID TO THE CENTRAL GOVERNMENT AND INCOME IS SUSTAINABLE OVER THE NUMBER OF YEARS, CREDIT OF TDS IS ALLOWABLE DURING THOSE YEARS PROPORTIONATELY IN WHICH INCOME ASSESSABLE IS TAXED . ASSESSEE HAS EXPLAINED THE FACTUAL AND LEGAL POSITION BY FILING WRITTEN SUBMISSIONS BEFORE THE LD. CIT (A) EXTRACTED IN PAR A 4.4.3 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) WHICH ARE AS UNDER:- 4.4.3 DURING THE APPELLATE HEARING, THE AR PLACED HIS ARGUMENTS IN WRITING, AS EXTRACTED IN PARA 4 ABOVE AND AS SUMMARIZED HEREUNDER : A) THE APPELLANT APART FROM SALES OF EQUIPMENT ALSO PROVIDES AFTER SALES SERVICES TO THE CUSTOMERS. THE USUAL P ERIOD FOR WHICH PAYMENT IS MADE UP FRONT BY THE CUSTOMER SPANS 3 TO 4 YEARS AND THEREFORE THE REVENUE FROM SUCH SERVICES IS RECOGNI ZED BY THE APPELLANT ON YEAR TO YEAR BASIS. THE APPELLANT COMPANY RECOGNIZES THE REVENUE ON PERCENTAGE COMPLETION METHOD AND THUS THE REVENUE I S RECOGNIZED OVER THE TENURE OF THE CONCERNED AMC CON TRACT. FOR EXAMPLE, IF THE CONTRACT IS OF FOUR YEARS, THE APPE LLANT RECOGNIZES 25% OF THE PAYMENT FOR EACH YEAR. ITA NO.1113/DEL./2017 8 B) BUT THE TDS BY THE CUSTOMER IS MADE ON THE WHOLE OF THE UPFRONT PAYMENT AS PER THE PROVISIONS OF THE ACT, B EING STATUTORILY BOUND TO DEDUCT THE TAX AT THE TIME OF CREDIT OR PAYMENT, WHICHEVER IS EARLIER. C) THE AO HAS NOT ONLY NOT ALLOWED THE TDS RELATED TO THIS DEFERRED REVENUE BUT ALSO ADDED THE TDS SO DISALLOW ED AS INCOME, AND BOTH THE ACTIONS OF THE AO ARE IMPROPER . D) FROM THE LEGAL ANGLE, IT IS THE CONTENTION OF TH E AR THAT WITH THE CHANGE IN LAW IN SECTION 199, THE TDS CRED IT IS TO BE GIVEN IRRESPECTIVE OF THE YEAR TO WHICH IT RELATES. MORE IMPORTANTLY THE AR RELIED ON THE DECISION OF ACIT V S. PEDDU S RAO. IT IS CONTENDED THAT WHEN A RELATED REVENUE I S BOOKED A SUBSEQUENT FINANCIAL YEARS, THE APPELLANT SHOULD BE ELIGIBLE TO MAKE A CLAIM OF THE ENTIRE TDS IN THE YEAR OF DEDUC TION. RELIANCE HAS BEEN PLACED ON THE DECISION OF TOYO EN GINEERING INDIA 5 SOT 616 (MUMBAI). E) IT IS CONTENDED THAT THE APPELLANT HAS ALL ALON G BEEN OFFERING ITS INCOME IN A CONSISTENT MANNER IN TERMS OF THE PROVISIONS CONTAINED IN SECTION 145 OF THE INCOME T AX ACT AND THEREFORE CREDIT NEEDS TO BE GIVEN CONTINUOUSLY FOR THESE ASSESSMENT YEARS. F) IT WAS EMPHASIZED THAT IN THE CASE OF TOYO ENGIN EERING INDIA, RELIED ON BY THE APPELLANT, THE TRIBUNAL HEL D THAT IT MAY NOT BE POSSIBLE ALL THE TIME OF CORRELATE A SPECIFI C AMOUNT OF TDS WITH A SPECIFIC AMOUNT OF INCOME EARNED BY AN ASSES SEE AND THE CORRELATION BETWEEN THE TAXABLE INCOME IS RATHER NOTIONAL/CONCEPTUAL ONLY AND THUS THE TDS CREDITS S HOULD BE ALLOWED TO THE APPELLANT. G) THE ABOVE JUDGMENT WAS FOLLOWED BY ANOTHER JUDGM ENT OF ITAT, VISAKHAPATNAM IN ACIT VS. P SRINIVASA RAO (IT A NO.324/VIZAG/2009 DT. 3/3/2011). IN THAT JUDGMENT, IT WAS HELD THAT ONCE TDS IS DEDUCTED ON THE MOBILIZATION ADVAN CE, DISTRIBUTED AND WHICH ARE TO BE ADJUSTED AGAINST TH E WORK BILLS TO BE RAISED BY THE ASSESSEE AND PAID TO CENTRAL GOVER NMENT, CREDIT OF THE SAME SHOULD BE GIVEN TO THE ASSESSEE IN ORDE R TO AVOID ALL SORTS OF COMPLICATIONS IN THE YEAR OF DEDUCTION OF TDS. THE AR HAS ALSO RELIED ON THE DECISIONS OF SADHAV ENGG LTD . 45 TAXMANN.COM 333 (AHD); ZELAN PROJECTS PRIVATE LIMIT ED (ITA 1361/HYD/2013); CHANDERSHEKHAR AGARWAL VS ACIT (ITA T DELHI) IN THIS REGARD. ITA NO.1113/DEL./2017 9 LD. AR FOR THE ASSESSEE ALSO RELIED UPON THE ORDERS PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD. VS. DCIT IN ITA NO.3221/D EL/2017 ORDER DATED 31.12.2019 . 14. LD. DR FOR THE REVENUE RELIED UPON THE ORDERS P ASSED BY THE AO AS WELL AS LD. CIT (A). 15. CO-ORDINATE BENCH OF THE TRIBUNAL IN CASE OF HCL COMNET SYSTEMS AND SERVICES LTD. (SUPRA) DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY RETURNING FOLLOWING FINDI NGS :- 23. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT SECTION 199( 3) OF THE ACT GIVES POWER TO THE BOARD TO MAKE SUCH RULES FOR THE PURPOSES OF GIVING CREDIT IN RESPECT OF TAX DEDUCTE D OR TAX PAID IN TERMS OF PROVISIONS OF THE ACT AND ALSO A.Y FOR WHICH SUCH CREDIT MAY BE GIVEN. RULE 37BA(3)(II) PROVIDES THAT WHERE TAX HAS BEEN DEDUCTED AT SOURCE AND PAID TO C ENTRAL GOVERNMENT AND INCOME IS SUSTAINABLE OVER A NUMBER OF YEARS, CREDIT FOR TAX DEDUCTED AT SOURCE SHALL BE A LLOWED ACROSS THOSE YEARS IN SAME PROPORTION IN WHICH INCO ME IS ASSESSABLE TO TAX. WE, ACCORDINGLY, DIRECT THE ASSE SSING OFFICER TO GIVE PROPORTIONATE CREDIT OF TDS FOR THE INCOME DECLARED DURING THE YEAR UNDER CONSIDERATION. WITH THESE DIRECTIONS, GROUND NO. 3 IS ALLOWED. 16. SO, IN VIEW OF THE UNDISPUTED FACTUAL POSITION EXPLAINED BY THE ASSESSEE AND FOLLOWING THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF HCL COMNET SYSTEMS AND SERVICES LTD. (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THE TDS CREDIT IS TO BE TAKEN IRRESPECTIVE OF THE YEAR TO W HICH IT RELATES EVEN WHEN A RELATED REVENUE IS BOOKED IN SUBSEQUENT FINA NCIAL YEAR, THE ITA NO.1113/DEL./2017 10 ASSESSEE IS ENTITLED TO MAKE CLAIM OF THE ENTIRE TD S IN THE YEARS OF DEDUCTION. SO, THE ASSESSEE IS ENTITLED FOR CREDIT FOR TAX DEDUCTED AT SOURCE PROPORTIONATELY ACROSS THOSE YEARS IN WHICH INCOME IS ASSESSABLE TO TAX. CONSEQUENTLY, AO IS DIRECTED TO ALLOW CREDIT OF TDS ON PROPORTIONATE BASIS AS REQUIRED UNDER RULE 3 7BA (3)(II). SO, GROUNDS NO.2 AND 2.1 ARE ALLOWED. 17. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE I S HEREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 4 TH DAY OF SEPTEMBER, 2020. SD/- SD/- (O.P. KANT) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 4 TH DAY OF SEPTEMBER, 2020. TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-39, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.