RAJASTHAN AVAS & INFRASTUCTURE LTD., Jaipur V. DCIT, Jaipur

ITA 247/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5347 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 31-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 247 & 248/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 & 10-11 . RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. (FORMALLY KNOWN AS AVAS VIKAS LTD.) B.L.DUSAD & CO., 2 ND FLOOR, KHETAN BHAWAN, M.I. ROAD, JAIPUR. CUKE VS. THE DCIT, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABCA 3281 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI SHYAM LAL AGARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BATEJA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15.03.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 18/03/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE ARISIN G FROM TWO SEPARATE ORDERS DATED 24.01.2014 PASSED BY THE LEARNED CIT (A)-II, JAIPUR FOR THE A.Y. 2009-10 AND 2010-11. THE EFFECTIVE GROUND RAISED BY THE ASSESSE E IS AS UNDER :- ITA NO. 247/JP/2014 (A.Y. 2009-10) : IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT (A) HAS ERRED IN NOT ALLOWING CREDIT OF TDS OF RS. 4502798/-, DEDUCT ED BY OUR BANK ON INTEREST AND DEPOSITED TO THE INCOME TAX DEPARTMENT AND HOLDING THAT THE INTEREST BELONGS TO POLICE DEPARTMENT AND THE P ROVISIONS OF SECTION 199 ARE APPLICABLE. 2 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT ITA NO. 248/JP/2014 (A.Y. 2010-11) : IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT (A) HAS ERRED IN NOT ALLOWING CREDIT OF TDS OF RS. 1741463/-, DEDUCT ED BY OUR BANK ON INTEREST AND DEPOSITED TO THE INCOME TAX DEPARTMENT AND HOLDING THAT THE INTEREST BELONGS TO POLICE DEPARTMENT AND THE P ROVISIONS OF SECTION 199 ARE APPLICABLE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IS AN APPROVED CONSTRUCTION COMPANY ENGAGED IN THE BUSINESS OF CON STRUCTION WORKS OF GOVERNMENT DEPARTMENT ON ACTUAL PLUS SYSTEM. THE ASSESSEE WAS INCORPORATED UNDER THE INDIAN COMPANIES ACT, 1956 ON 20 TH JUNE, 1996. OUT OF THE TOTAL SHARE OF 20070 SHAR ES, 20000 SHARES ARE HELD BY RAJASTHAN HOUSING BOARD. THE RAJASTHAN HOUSING BOARD IS A STATUTORY BODY CREATED THROUGH RAJASTHAN STATE ACT NO. 4 OF 1970. THUS THE ASSESSEE IS A COMPANY OF THE STATUTORY BODY OF RAJASTHAN HOU SING BOARD (STATE OF RAJASTHAN FOR THE PURPOSES OF THE ACT). THE OBJECT OF THE ASSESS EE IS TO CONSTRUCT HOUSES FOR POOR IN ACCORDANCE WITH THE PROGRAMME OF GOVERNMENT OF RAJA STHAN. THE STATE GOVERNMENT HAS TAKEN A DECISION TO CONSTRUCTION 10,000 HOUSES FOR POLICE PERSONNEL AND FOR THAT PURPOSES A LOAN OF RS. 451.52 CRORES WAS TAKEN FROM HUDCO. THE LOAN WAS DISBURSED TO THE PUBLIC WORKS DEPARTMENT, RAJASTHAN ROAD DEVE LOPMENT AND CONSTRRUCTION CORPORATION LTD. AND THE ASSESSEE WAS APPOINTED AS A NODAL AGENCY TO EXECUTE THE WORK ALLOTTED (PAGE 3 OF PAPER BOOK). THE HUDCO HA S SANCTIONED ADDITION LOAN OF RS. 168.72 CRORES ON FURNISHING THE GUARANTEE BY THE ST ATE GOVERNMENT WITH BUDGETARY PROVISIONS FOR REPAYMENT OF LOAN AND INTEREST THERE ON (PAGE 7 OF THE PAPER BOOK). THE 3 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT HOUSING PROJECT WAS TO BE COMPLETED IN AN ASSOCIATI ON WITH THE THREE GOVERNMENT DEPARTMENTS, NAMELY, PWD, RAJASTHAN STATE ROAD DEVE LOPMENT AND CONSTRUCTION CORPORATION LTD AND THE ASSESSEE. THE ASSESSEE WAS ACTING AS A NODAL AGENCY IN THE STATE GOVERNMENT FOR OBTAINING THE LOAN FROM HUDCO AND DISTRIBUTING THE SAME TO THREE GOVERNMENT DEPARTMENTS, NAMELY PWD, RSRDCC AN D AVAS VIKAS LTD. (WHO WAS ASSIGNED THE WORK OF CONSTRUCTION OF HOUSES FOR POL ICE DEPARTMENT). 2.1. THE ADMITTED FACTS, AS PER THE ASSESSMENT ORDE R ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE DEPOSITED FUNDS RECEIVED FROM HUDCO IN FDRS WITH THE BANK AS THE SAME WERE LYING IDLE AND GOT THE INTERE ST OF RS. 2,18,15,365/- AND ON THE SAID INTEREST THE BANK OF RAJASTHAN HAD DEDUCTED TD S OF RS. 45,02,798/-. THE ASSESSEE DID NOT OFFER THE INTEREST INCOME OF RS. 2 ,18,15,365/- FOR THE PURPOSE OF TAX IN THE RETURN OF INCOME AS THE ASSESSEE WAS MERELY ACT ING AS A NODAL AGENCY FOR THE STATE OF RAJASTHAN AND HAS DEPOSITED THE AMOUNT WITH THE BANK FOR AND ON BEHALF OF STATE OF RAJASTHAN. IT WAS ALSO THE CASE OF THE ASSESSEE TH AT THE INTEREST INCOME ACCRUED ON THE FDRS WAS NOT TAXABLE. THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE IS ENTITLED TO THE REFUND OF ENTIRE AMOUNT OF RS. 45,02,798/- IN THE A SSESSMENT YEAR 2009-10. HOWEVER, THE LD. AO HAS DENIED THE REFUND OF TDS ON THE FOLL OWING GROUNDS :- 4. THE ASSESSEE HAS CLAIMED CREDIT OF TDS OF RS.1 ,26,78,670/- ON EXAMINATION IT HAS COME TO NOTICE THAT ASSESSEE HAS CLAIMED CREDIT OF TDS OF RS. 45,02,798/- IN RESPECT OF FDR INTEREST OF RS. 2,18,65,365/-. ON BEING ASKED TO THE ASSESSEE WHETH ER THE SAID INCOME WAS SHOWN IN PROFIT & LOSS ACCOUNT, THE ASSE SSEE HAS SUBMITTED THAT AVAS VIKAS LTD. HAS BEEN APPOINTED A S NODAL AGENCY BY GOVERNMENT OF RAJASTHAN FOR POLICE HOUSING SCHEM E AND AS PER MOU WITH GOVT. THE INTEREST INCOME PERTAINS TO GOVE RNMENT. THUS, THE SAID INTEREST INCOME HAS BEEN CREDITED TO POLIC E DEPARTMENT. 4 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT THIS FACT WAS ALSO MENTIONED IN NOTE NO. 15 TO AUDI TED FINANCIAL ACCOUNT, THUS NO INTEREST INCOME HAS BEEN OFFERED F OR TAX BY ASSESSEE IN RESPECT OF CREDIT OF TDS OF RS. 445,02, 798/-. SECTION 199 OF THE ACT PROVIDES THAT ANY DEDUCTION MADE UNDER CHAPTER XVII-B AND PAID TO CENTRAL GOVERNMENT SHALL BE TREATED AS A PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE OR THE OWNER OF THE SECURITY. R ULE 37BA OF I.T. RULES 1962 READ WITH SECTION 199 PROVIDES THAT IF THE INCOME ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE IS ASSESSA BLE IN THE HAND OF A PERSON OTHER THAN THE DEDICATEE CREDIT FO R TAX DEDUCTED AT SOURCE SHALL BE GIVEN TO OTHER PERSON. 3. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER PASS ED BY THE AO, HAS CHALLENGED THE ORDER BEFORE LD. CIT (A). HOWEVER, THE LD. CIT (A) HAD ALSO UPHELD THE ORDER PASSED BY THE AO WITH THE FOLLOWING OBSERVATIONS : 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE; ASS ESSMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. ASSESSING OFFIC ER DID NOT ALLOW CREDIT OF TDS DEDUCTED ON INTEREST INCOME NOT SHOWN BY THE APPELLANT BY FOLLOWING THE PROVISIONS OF SECTION 19 9 READ WITH RELEVANT RULES THAT CREDIT IS TO BE GIVEN TO THE PE RSON IN WHOSE HAND SUCH INCOME IS TAXABLE. ASSESSING OFFICER MENT IONED THAT IN THE NOTE TO FINANCIAL STATEMENT, IT IS CLEARLY MENT IONED THAT INCOME TO THE EXTENT OF RS. 2,18,65,365 IS NOT INCLUDED IN THE HANDS OF THE APPELLANT SINCE IT WAS RECEIVING IT IN FIDUCIARY CA PACITY. ASSESSING OFFICER DID NOT TAX THIS INTEREST INCOME BUT DID NO T ALLOW THE CREDIT OF TDS DEDUCTED ON THIS INCOME AS PER SECTION 199. APPELLANT SUBMITTED THAT IT RECEIVED INTEREST INCOME FOR AND ON BEHALF OF POLICE DEPARTMENT OF STATE GOVERNMENT WHICH IS NOT A TAXABLE ENTITY AND, THEREFORE, INCOME WAS RECEIVED IN FIDUCIARY CA PACITY. ACCORDINGLY THE CREDIT OF TDS SHOULD BE GIVEN TO TH E APPELLANT. IT IS NOT IN DISPUTE THAT APPELLANT IS NOT LIABLE F OR TAX ON THE INTEREST INCOME RECEIVED FROM FUNDS TO BE PASSED ON TO POLIC E DEPARTMENT STATE OF RAJASTHAN. THE DECISIONS RELIED UPON BY TH E APPELLANT ARE ONLY ON THIS ISSUE THAT INCOME RECEIVED IN FIDUCIAR Y CAPACITY WILL NOT BE TAXABLE IN THE HANDS OF PERSON RECEIVING IT. SIN CE THERE IS NO DISPUTE ON THE TAXABILITY OF INTEREST INCOME RECEIV ED IN FIDUCIARY CAPACITY, THESE DECISIONS ARE NOT RELEVANT TO THE I SSUE INVOLVED HERE 5 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT HENCE NOT DISCUSSED HERE. THE ONLY ISSUE INVOLVED IN THESE GROUNDS OF APPEAL IS ABOUT CREDIT OF TDS DEDUCTED O N THIS INCOME. SINCE INTEREST INCOME ON WHICH TDS WAS DEDUCTED WAS NOT OFFERED FOR TAX IN THE CASE OF APPELLANT, APPELLANT IS NOT ENTITLED TO CLAIM TDS CREDIT AS PER SECTION 199 READ WITH RELEVANT RU LES. THE CREDIT OF TDS CAN BE CLAIMED ONLY BY THE PERSON WHO IS OFFERI NG THE SAID INCOME FOR TAX. THEREFORE IT IS CLEAR THAT CREDIT OF TDS CANNOT BE GIVEN TO THE APPELLANT IN VIEW OF EXPRESS PROVISION S OF SECTION 199 OF IT ACT READ WITH RELEVANT RULES. CREDIT OF THIS TDS CAN BE CLAIMED ONLY BY RECIPIENT OF THE INCOME WHICH IS POLICE DEP ARTMENT WHICH IS PART OF STATE GOVERNMENT. STATE GOVERNMENT IS NOT A TAXABLE ENTITY AND THEREFORE THERE IS NO QUESTION OF OFFERING INTE REST INCOME FOR TAX. HOWEVER, AS FAR AS CREDIT OF TDS DEDUCTED IS C ONCERNED, APPELLANT CANNOT CLAIM THE SAME IN VIEW OF THE PROV ISIONS DISCLOSED EARLIER. ACCORDINGLY, THE AOS DECISION IN NOT ALLO WING CREDIT OF TDS TO THE APPELLANT IS CONFIRMED. 4. NOW THE ASSESSEE IS BEFORE US. 4.1. THE LD. A/R FOR THE ASSESSEE HAS SUBMITTED THA T NON REFUND OF TDS AMOUNT OF RS. 45,02,798/- BY APPLYING SECTION 199 OF THE IT A CT IS ILLEGAL, UNJUSTIFIED AND WITHOUT ANY BASIS. IN SUPPORT OF HIS SUBMISSION, THE LD. A/ R HAS STATED THE FOLLOWING FACTS :- 1. THE STATE GOVERNMENT OF RAJASTHAN PLANNED TO CONSTR UCT HOUSES FOR THE POLICE DEPARTMENT. 2. FOR THIS PURPOSE LOAN WAS OBTAINED FROM HUDCO BY TH E GOVT. OF RAJASTHAN. 3. AVAS VIKAS LIMITED WAS MADE NODAL AGENCY FOR RECEIV ING THE LOAN ON BEHALF OF THE GOVT. AS WELL AS FOR REPAYING THE LOAN LATER ON. 4. THE WORK OF CONSTRUCTION OF HOUSES WAS AWARDED TO P WD, RAJASTHAN STATE ROAD DEVELOPMENT AND CONSTRUCTION COOPERATION LIMIT ED AND AVAS VIKAS LIMITED. 5. TILL THE CONSTRUCTION WAS STARTED, FOR INTERVENING PERIODS THE FIRMS RECEIPTS BY AVAS VIKAS LIMITED FROM HUDCO WERE DEPOSITED IN BAN K OF RAJASTHAN (NOW ICICI BANK) BY AVAS VIKAS LIMITED. 6 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT 6. AT ALL THE STAGES THE GOVERNMENT OF RAJASTHAN WAS H AVING OVER RIDING TITLE OVER THE FUNDS LYING WITH AVAS VIKAS LIMITED/BANK O F RAJASTHAN. THE AVAS VIKAS LIMITED WAS ACTING IN FIDUCIARY CAPACITY. 7. THE BANK OF RAJASTHAN GRANTED INTEREST ON THESE FUN DS AMOUNTING TO RS. 2,18,15,365/- AND DEDUCTED TDS OF RS 45,02,798/-. 8. AS THE OWNERSHIP OF DEPOSITS WAS OF THE GOVT. OF RA JASTHAN BY VIRTUE OF OVERRIDING THE TITLE, THE INTEREST EARNED ON SUCH D EPOSITS BELONGS TO THE GOVT. OF RAJASTHAN AND HAPPENED TO BE INCOME OF GOVT. OF RAJASTHAN. 9. ON INTEREST PAYABLE TO GOVT., TDS IS NOT APPLICABLE U/S 196 OF THE INCOME TAX ACT, 1961. AS SUCH THE BANK ERRED IN DEDUCTING TAX ON INTEREST INCOME WHICH BELONGS TO THE GOVT. OF RAJASTHAN. 10. THE AMOUNT OF TDS ALSO BELONGS TO GOVT. OF RAJASTHA N AND THE REFUND OF THIS AMOUNT SHALL BE CREDITED TO THE ACCOUNT OF GOVT. OF RAJASTHAN. 11. THUS NEITHER THE INTEREST INCOME WAS TAXABLE IN HAN DS OF THE ASSESSEE I.E. AVAS VIKAS LTD. NOR IT IS TAXABLE IN ANY OTHER HAND AS THE SAME HAS EXEMPT U/S 196 BEING THE INCOME OF GOVT. OF RAJASTHAN. SO THE TDS HAS TO BE REFUNDED BACK TO THE ASSESSEE SO THE SAME IS CREDIT ED IN ACCOUNT OF GOVT. OF RAJASTHAN. IN SUPPORT OF THE ABOVE FACTS, THE LD. A/R PLACED R ELIANCE ON A RECENT JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE MATTER OF GUJARAT POWER COOPERATION VS. ITO, 354 ITR 201 (GUJ.) WHEREIN EXACTLY SIMILAR FACTS AS THA T OF THE ASSESSEE ARE INVOLVED. THUS THE LD. A/R REQUESTED TO ALLOW THE APPEAL OF THE AS SESSEE. 4.2. ON THE OTHER HAND, THE LD. D/R FOR THE REVENUE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IN OUR VIEW THE ISSUE INVOLVED IN THE PRESENT APPEAL H AD ALREADY BEEN ADJUDICATED IN THE 7 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT MATTER OF CIT VS. RELCOM (2015) 62 TAXMANN.COM 190 (DELHI) WHEREIN IT WAS HELD AS UNDER :- 6. HAVING HEARD THE SUBMISSIONS MADE ON BEHALF OF THE REVENUE AND AFTER A PERUSAL THE ORDERS PASSED BY THE CIT(A) AND THE ITAT, WE ARE OF OPINION THAT THE SAID ORDERS DO NOT CALL FOR ANY INTERFERENCE AND WERE WARRANTED AND JU STIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE WE PROCEED TO ELABORATE ON OUR REASONS FOR THE SAME, A PERUSAL OF SECTION 199 OF THE ACT IS NECESSARY. SECTION 199 RE ADS AS FOLLOWS: '199. CREDIT FOR TAX DEDUCTED. (1) ANY DEDUCTION MADE IN ACCORDANCE WITH THE FOREG OING PROVISIONS OF THIS CHAPTER AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS A PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE, OR OF THE OWNER OF THE SECURITY, OR OF THE DEPOSITOR OR OF THE OWNER OF PROPERTY OR OF THE UNIT-HOLDER, OR OF THE SHAREHOLDER, AS THE CASE MAY BE. (2) ANY SUM REFERRED TO IN SUB-SECTION (1A) OF SECT ION 192 AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS THE TAX PAID ON BEHA LF OF THE PERSON IN RESPECT OF WHOSE INCOME SUCH PAYMENT OF TAX HAS BEEN MADE. (3) THE BOARD MAY, FOR THE PURPOSES OF GIVING CREDI T IN RESPECT OF TAX DEDUCTED OR TAX PAID IN TERMS OF THE PROVISIONS OF THIS CHAPTER, MAKE SU CH RULES AS MAY BE NECESSARY, INCLUDING THE RULES FOR THE PURPOSES OF GIVING CREDIT TO A PE RSON OTHER THAN THOSE REFERRED TO IN SUB- SECTION (1) AND SUB-SECTION (2) AND ALSO THE ASSESS MENT YEAR FOR WHICH SUCH CREDIT MAY BE GIVEN.' 7. THE REVENUE RELIES ON THE PHRASE 'SHALL BE TREATED AS A PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE' TO CONTEND THAT THE ASSESSEE'S TDS CLAIM CANNOT BE BASED ON THE RECEIPTS OF M/S REPL. HOWEVER, THE ASSESSEE FAIRLY ADMITTED THROUGHOUT THE PROCEEDINGS FOR ITS TDS CLAIM OF RS. 1,20,73,097/- THAT THE BENEFIT OF SUCH CLAIM HAS NOT BEEN AVAILED BY M/S. REPL. THEREFORE, THE REVENUE, HAVING ASSESSED M/S REPL'S INCOME IN RESPECT TO SUCH TDS CLAIM CANNOT N OW DENY THE ASSESSEE'S CLAIM ON THE MERE TECHNICAL GROUND THAT THE INCOME IN RESPECT OF THE SAID TDS CLAIM WAS NOT THAT OF THE ASSESSEE, GIVEN THAT M/S RELCOM (THE ASSESSEE) AND M/S REPL ARE SISTER CONCERNS AND M/S REPL HAS NOT RAISED ANY OBJECTION WITH REGARD TO TH E ASSESSEE'S TDS CLAIM OF RS. 1,20,73,097/-. 8. THIS COURT'S REASONING IS SUPPORTED BY A RULING OF THE DIVISION BENCH OF THE ANDHRA PRADESH HIGH COURT IN CIT V. BHOORATNAM & CO. [2013] 357 ITR 396/216 TAXMAN 6/29 TAXMANN.COM 275 WHERE THE COURT NOTED AS FOLLOWS: 'IN OUR VIEW, THE CIT (APPEALS) AND THE TRIBUNAL HA VE RIGHTLY HELD THAT THE ASSESSEE IS ENTITLED TO THE CREDIT OF THE TDS MENTIONED IN THE TDS CERTIFICATES ISSUED BY THE CONTRACTOR, WHETHER THE SAID CERTIFICATE IS ISSUED IN THE NAME OF THE JOINT VENTURE OR IN THE NAME OF A DIRECTOR OF THE ASSESSEE COMPANY. THEY HA VE CONSIDERED THE TERMS OF THE AGREEMENT DATED 12-03-2003 AMONG THE PARTIES TO THE JOINT VENTURE AND HELD THAT CREDIT 8 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT FOR TDS CERTIFICATES CANNOT BE DENIED TO THE ASSESS EE WHILE ASSESSING THE CONTRACT RECEIPTS MENTIONED IN THE SAID CERTIFICATES AS INCOME OF THE ASSESSEE. THE INCOME SHOWN IN THE TDS CERTIFICATES HAS EITHER TO BE TAXED IN THE HANDS OF THE JOINT VENTURE OR IN THE HANDS OF THE INDIVIDUAL CO-JOINT VENTURER. AS THE JOINT VENTURE HAS NOT FILED RETURN OF INCOME AND CLAIMED CREDIT FOR TDS CERTIFICATES AND THE TDS CER TIFICATES HAVE NOT BEEN DOUBTED, CREDIT HAS TO BE GRANTED TO THE TDS MENTIONED THEREIN FOR THE ASSESSEE. THE REVENUE CANNOT BE ALLOWED TO RETAIN TAX DEDUCTE D AT SOURCE WITHOUT CREDIT BEING AVAILABLE TO ANYBODY. IF CREDIT OF TAX IS NOT ALLOW ED TO THE ASSESSEE, AND THE JOINT VENTURE HAS NOT FILED A RETURN OF INCOME, THEN CREDIT OF TH E TDS CANNOT BE TAKEN BY ANYBODY. THIS IS NOT THE SPIRIT AND INTENTION OF LAW.'(EMPHA SIS SUPPLIED) 9. AT THIS STAGE, IT IS ALSO RELEVANT TO NOTE THE PRO VISIONS OF RULE 37BA OF THE INCOME TAX RULES, 1962, WHICH ENVISIONS GRANT OF TDS CREDIT TO ENTITIES OTHER THAN THE DEDUCTEE (HEREIN, M/S REPL). WE MUST CLARIFY THAT WE ARE NOT OBLIVIOUS OF THE FACT THAT RULE 37BA IS NOT DIRECTLY APPLICABLE IN THE FACTS OF THIS CAS E. THE RELIANCE PLACED ON RULE 37BA IS MERELY TO DEMONSTRATE THAT IN NOT ALL CIRCUMSTANCES IS TDS CREDIT GIVEN TO THE DEDUCTEE. IN THE PRESENT CASE THE AMOUNT WAS DEPOSITED AS FDR S BY THE ASSESSEE ON BEHALF OF STATE OF RAJASTHAN WITH THE BANK OF RAJASTHAN AND O N THE FDRS DEPOSIT THE INTEREST HAS BEEN ACCRUED . THE TDS WAS DEDUCTED BY THE BANK ON THE INTEREST ACCRUED ON THE FDRS. IN OUR VIEW, THE REVENUE IS TAKING THE HYPER TECHNICAL PLEA OF NOT RETURNING THE TDS TO THE ASSESSEE ON THE PRETEXT THAT THE AMOUNT HAS BEEN DEPOSITED WITH THE BANK ON BEHALF OF STATE OF RAJASTHAN. SINCE THE STATE OF RAJASTHAN IS NOT A TAXABLE ENTITY, THEREFORE, REFUND OF TDS CANNOT BE GIVEN TO THE STA TE OF RAJASTHAN. IT IS NOT DISPUTED THAT THE ASSESSEE AFTER REALIZING THE INTEREST INCO ME FROM THE BANK HAS GIVEN BACK THE AMOUNT TO THE STATE OF RAJASTHAN . SIMILARLY IT IS ALSO UNDISPUTED THAT THE REFUND OF TDS HAS NOT BEEN CLAIMED BY THE THE STATE OF RAJAS THAN AND IS ONLY CLAIMED BY THE ASSESSEE BEING THE NODAL AGENCY OF THE STATE OF R AJASTHAN FOR THIS PROJECT . IN OUR VIEW, NO PREJUDICE WILL BE CAUSED TO ANY PERSON IF THE TDS IS REFUNDED TO THE ASSESSEE BEING THE NODAL AGENCY WITH THE UNDERTAKING TO RETU RN THE AMOUNT TO THE STATE OF 9 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT RAJASTHAN. IN VIEW OF THEREOF AND ALSO IN VIEW OF THE JUDGMENT REFERRED HEREINABOVE, THE TDS DEDUCTED BY THE INCOME TAX DEPARTMENT IS DI RECTED TO BE PAID TO THE ASSESSEE AND WE ACCORDINGLY HOLD THE SAME. IN THIS VIEW OF THE MATTER, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. SIMILAR GROUND IS RAISED IN THE ASSESSEES APPEA L IN ITA NO. 248/JP/2014 FOR THE ASSESSMENT YEAR 2010-11. SINCE WE HAVE DECIDED THE ASSESSEES APPEAL IN ITA NO. 247/JP/2014 IN ITS FAVOUR, ON THE SAME REASONING WE DECIDE THE APPEAL OF THE ASSESSEE FOR THE A.Y. 2010-11 IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/03/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 /03/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RAJASTHAN AVAS VIKAS & INFRASTRUCTUR E LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-6, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 247 & 248/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 10 ITA NO. 247 & 248/JP/2014 RAJASTHAN AVAS VIKAS & INFRASTRUCTURE LTD. VS. DCIT