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2. That the Ld. CIT(A) has erred in law and on the facts of the case in confirming the order of the Income Tax Office r, Ward -3(1)(2), International Taxation, Delhi (' Ld. AO') and not a llo wing credit of Tax Deductible at So urce ("TDS') o f INR 68,82,340 to the Appellant.

3. The Ld. CIT(A) has erred in law and on facts and circums tances of the case in rejecting the cre dit of TDS of INR 6,882,340 for the subjec t year without appreciating the legal positio n that income from offshore supply receive d by the Appellant is no t taxable in India under the provisio ns of the Act rea d w ith Double Taxation A voidance Agreement ente red betwee n India and China (" Tax Treaty") .

the incorrect assumptio ns/infere nce made by the .d. CIT(A) are as under:

(a) The appellant has itself contested that Ld. AO has erred in facts and in law in not giving direc tions for allo wing the cre dit of TDS of INR 6,882,340 deducte d on mobiliza tion adva nces in the year in whic h ac tual offshore supplies we re undertaken by the Appellant.

(b) The Appellant is acce pting that the ques tio n of these receipts (mobilization advance) ha ving element o f income could be decided in the year in which actual o ffs hore supplies we re undertaken by the Appellant.

12. As per Section 199(1) of the Act, any deductions ma de in accor dance with the foregoing provisio ns of this chapter and paid to the Central Go vernment shall be treated as payment of tax o n behalf of the person from whose income the deduction is made. Therefore, as per the pro visions, o nce TDS was deducted, a cre dit of the same is to be given to the assesse e. Considering the same, the claim of credit of withholding tax should be allowed to Assessee as per provisions of the Act.

13. The Co-ordinate Bench of ITAT, in the case of Escorts Ltd. vs. Deputy Commissio ner of Income tax [2007] 15 SOT 368 (Delhi) held that once deduction of tax at source is made and the same is deposited with the Government then the assessee beco mes entitled for credit of such TDS while computing the tax liability for the period irrespective of the fact tha t the assessee considered that he is not liable to tax in respect of the income and, therefore, does not disclose the amount of income in his retur n. The Income-tax Department cannot refuse to give credit merely by contending that the income has not been disclosed in the return file d by the assessee for the assessment year . The relevant extract of the judgme nt in this regard is repro duced below:

Siemens International Trading Ltd.

"....7. Credit for TDS must in e very case be give n to the assessee from whose income tax was deducte d at source and paid to the cre dit of the Central Government. If the recipie nt of the inc ome considers that he is no t liable to tax in res pect of the income, wholly o r partly, therefore, does not disclose the amo unt of suc h income in his re turn, the Income-tax Department cannot refuse to give cr edit merely by contending that the income had no t been disclose d in the return filed by the assessee for the asse ssment year. The assessee may as per relev ant prov isions of Income-tax Act, co nsider the income either as not taxa ble in his hands or as being relatable to a differe nt assessment ye ar and he ma y even claim set off of loss or other deduc tio ns against such income. T he assessee may also be no t char geable to tax on the income bec ause o f the ove rriding provisio ns of Double Taxa tion Avo idance A greement and/o r because of the provisio n for exemption o f such income, whe ther wholly or partly, under some provisions o f the Income-tax Act. It wo uld be, the refo re, imprope r and eve n impermiss ible for the re venue to swallow the amount of TDS a fter having rece ived and enjo yed the same. It canno t be igno red tha t ever y item of TDS carries with it an obligation of tr ust and acco untability to re tur n the amount and/or give cre dit for the amount so deducte d depe nding upo n the tax liability of the recipient to be determined in the course o f his assessm ent."