Availment of tds credit

Query regarding TDS

Hi,

I am working in X Ltd. as an A.M.: Account & Finance and facing a problem regarding TDS. The matter as under:

X Ltd. is a Value Added Service provider company to various telecom operators i.e. Vodafone, Idea, Airtel etc. and raise the invoices on revenue sharing basis.

The problem is, suppose X Ltd. raised the invoice of Rs. 1,00,000/- for per month for the F.Y. 2010-11 that means our gross income was Rs. 12,00,000/- for the F.Y. 2010-11. But operator had deducted the TDS on Rs. 10,00,000/- @ 10%. And TDS deducted on rest amount i.e. Rs. 2,00,000/- in F.Y. 2011-12.

And we have computed the total income for the A.Y. 2011-12 as under:

Taxable Income for the A.Y. 2011-12 is Rs.		1,200,000
Tax on above income @ 30% Rs.		360,000
Education Cess on above Tax @ 3% Rs.		10,800
Total Tax Payable Rs.		370,800
Less : TDS by Operator	100,000
Less : Tax Paid u/s 140A	270,800	370,800
Tax Payable / (Refundable)		NIL

Next year i.e. F.Y. 2011-12 we raised the invoice of Rs. 1,50,000/- per month i.e. the gross total income for the A.Y. 2012-13 was Rs. 18,00,000/- and the operator deducted the TDS on Rs. 16,50,000/- @ 10% i.e. 1,65,000/-. During the year 26AS shown total TDS Rs. 1,85,000/- (Rs. 165000 + 20000).

Now we have computed the total income for A.Y. 2012-13 as under:

Taxable Income for the A.Y. 201-13 is Rs.		1,800,000
Tax on above income @ 30% Rs.		540,000
Education Cess on above Tax @ 3% Rs.		16,200
Total Tax Payable Rs.		556,200
Less : TDS by Operator	185,000
Less : Tax Paid u/s 140A	371,200	556,200
Tax Payable / (Refundable)		NIL

In this year Assessing Officer has refused to give the TDS Credit of Rs. 20000/- with reason this amount is related to F.Y. 2010-11 (A.Y. 2011-12) and create the demand of Rs. 20,000/- with Interest.

My point as under :

It is true, the TDS of Rs. 20,000/- is related to F.Y. 2010-11 i.e. A.Y.2011-12. But, if the operator deduct the TDS on whole amount i.e. 12,00,000/- @ 10% then TDS amount would be Rs. 1,20,000/- and we would have to pay the tax u/s 140A Rs. 2,50,800/- instead of Rs. 2,70,800/-.

But, when operator is deduct the TDS in next F.Y. 2011-12 i.e. A.Y. 2012-13 and same has been deposited in Government Account with showing his expenses related to F.Y. 2011-12 i.e. A.Y. 2012-13, we have not any other option to except to avail the TDS credit which is reflecting in 26AS.

My question is: