The assessee had developed customised software in the field of medical prescription data. The development of the software was completed during the year under consideration. During the process of development of software, some software patches were developed on which some revenue was earned and tax was deducted thereon by the parties from whom such revenue was received. The assessee\u00a0 reduced the\u00a0 revenue\u00a0 received from cost incurred to develop and claimed credit in those year when it was deducted.\u00a0 TDS credit was denied in the earlier assessment years because revenue was reduced from capitalised cost. Therefore, entire TDS credit was claimed in the current AY when the software was complete. The entire capitalised cost net of revenue was transferred to intangible assets. The lower authorities did not allow TDS on the ground that assessee should follow AS 7 and revenue should be recognised on percentage completion method.\u00a0 On appeal Tribunal\u00a0 relied upon the decision of Chennai ITAT case in case of Supreme Renewable Energy which had\u00a0 followed the ratio of decision in\u00a0 CIT v. Karnal Co-op Sugar Mills Ltd (200) 243 ITR 2 (SC)\u00a0 where it was held that, when an income is not directly liable for tax as the same is incidental to the cost or to the installation and acquisition of an asset, the tax deducted on such income shall be refunded to the assessee or is entitled to take credit of the same. Government cannot benefit itself from the taking advantage of legal technicalities. Reducing the income from the cost of the asset is indirectly offering the same for assessment and taxation. Accordingly, the appeal was allowed in favour of the assessee by allowing the\u00a0\u00a0 credit for tax deducted at source. (ITA No: 5989\/Mum\/2019), dated 21\/03\/2023.]<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 199 : Deduction at source-Credit for tax deducted-Percentage completion method-Receipt of revenue is reduced from the cost incurred-Tax deducted at source-Tax has deducted on a particular receipt the assessee should get credit even if the receipt is not directly offered for tax .[S. 4, 145] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-42203","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-aYH","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/42203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=42203"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/42203\/revisions"}],"predecessor-version":[{"id":42204,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/42203\/revisions\/42204"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=42203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=42203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=42203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}