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Tax Publishers ABB AB C/o ABB India Ltd. v. Dy. CIT [IT(I.T.)A Nos. 464/Bang/2018 & 2878/Bang/2019, dt. 31-8-2020] : 2020 TaxPub(DT) 3538 (Bang-Trib.) Refund of taxes arising out of MAP -- Credit of taxes arising by way of TDS -- Reading of section 199 *Facts:* Assessee a Swedish resident had done a project for Power Grid Corporation of India with onshore and offshore deliveries on which TDS was done by Power Grid while remitting monies outside India. Disputes arose in the matter of taxability of offshore/onshore contracts and by way of Mutual Agreement Procedure (MAP) both competent authorities agreed that offshore/onshore portion was not taxable in India. Thus refund arose for the TDS deducted. The MAP was signed for assessment year 2013-14 and assessment year 2014-15. The assessee claimed refund of taxes/TDS for assessment year 2012-13 on the said MAP. Revenue held back the refunds citing section 199 which read that the credits be granted only if the income was assessable/taxable in India (as it then stood) and the assessment year also being different refund of taxes can be granted only coherent to their year of taxability of income. Aggrieved assessee went in appeal to ITAT - Held in favour of the assessee that they were entitled to refund of taxes. *Upheld:* Arvind Murjani Brands (P) Ltd. v. ITO (2012) 21 taxmann.com 131 (Mum) : 2012 TaxPub(DT) 2466 (Mum-Trib) *Editorial Note:* The pre-amended section 199 reads as under -- Section 199. Credit for tax deducted.--(1) Any deduction made in accordance with the foregoing 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 depositor or owner of property or of unit-holder or of the shareholder, as the case may be, and credit shall be given to him for the amount so deducted on the production of the certificate furnished under section 203 in the assessment made under this Act for the assessment year for which such income is assessable. Post amended section 199 reads as under -- Section 199. (1) Any deduction made in accordance with the foregoing 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. The revenue's plea was based on the last line of the pre-amended section "in the assessment made under this Act for the assessment year for which such income is assessable". ITAT read against the above plea by concluding that if the plea of revenue was held workable then it would go contrary to Article 265 of the Constitution of India. Thus assessee was entitled to refund.

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ABB AB C/o ABB India Ltd. v. Dy. CIT [IT(I.T.)A Nos. 464/Bang/2018 & 2878/Bang/2019, dt. 31-8-2020] : 2020 TaxPub(DT) 3538 (Bang-Trib.)

Refund of taxes arising out of MAP -- Credit of taxes arising by way of TDS -- Reading of section 199

Facts:

Assessee a Swedish resident had done a project for Power Grid Corporation of India with onshore and offshore deliveries on which TDS was done by Power Grid while remitting monies outside India. Disputes arose in the matter of taxability of offshore/onshore contracts and by way of Mutual Agreement Procedure (MAP) both competent authorities agreed that offshore/onshore portion was not taxable in India. Thus refund arose for the TDS deducted. The MAP was signed for assessment year 2013-14 and assessment year 2014-15. The assessee claimed refund of taxes/TDS for assessment year 2012-13 on the said MAP. Revenue held back the refunds citing section 199 which read that the credits be granted only if the income was assessable/taxable in India (as it then stood) and the assessment year also being different refund of taxes can be granted only coherent to their year of taxability of income. Aggrieved assessee went in appeal to ITAT -

Held in favour of the assessee that they were entitled to refund of taxes.

Upheld: Arvind Murjani Brands (P) Ltd. v. ITO (2012) 21 taxmann.com 131 (Mum) : 2012 TaxPub(DT) 2466 (Mum-Trib)

Editorial Note: The pre-amended section 199 reads as under --

Section 199. Credit for tax deducted.--(1) Any deduction made in accordance with the foregoing 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 depositor or owner of property or of unit-holder or of the shareholder, as the case may be, and credit shall be given to him for the amount so deducted on the production of the certificate furnished under section 203 in the assessment made under this Act for the assessment year for which such income is assessable.

Post amended section 199 reads as under --

Section 199. (1) Any deduction made in accordance with the foregoing 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.

The revenue's plea was based on the last line of the pre-amended section "in the assessment made under this Act for the assessment year for which such income is assessable".

ITAT read against the above plea by concluding that if the plea of revenue was held workable then it would go contrary to Article 265 of the Constitution of India. Thus assessee was entitled to refund.