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2024 (3) TMI 1344 - AT - Income TaxDenial of Credit of TDS - credit for entire amount as deducted as tax at source U/s. 194Q from the commission income - since the assessee is only a commission agent, the assessee is eligible to get credit of the entire amount deducted as tax at source U/s. 194Q of the Act and therefore pleaded that the grounds raised by the assessee may be allowed - HELD THAT - Kaccha Arahtias turnover includes only the gross commission and not the sales effected on behalf of their principals. In the present case, it is a fact that the assessee is only a licensed commission agent in Agricultural Market Committee Yard, Guntur which is formed under the rules and regulation of the Government of Andhra Pradesh. Therefore, the Circular issued by the CBDT No. 452, dated 17th March, 1986squarely applies to the assessee and hence assessee is acted only as an agent (kaccha arahtia) and therefore it is eligible to get credit of the entire amount deducted as tax at source and there is no short fall of TDS as concluded by the Ld. Revenue Authorities. Accordingly, hereby set-aside the orders of Revenue Authorities and direct the Ld. AO to grant credit of the entire amount deducted as tax at source in the case of the assessee. The grounds raised by the assessee are allowed.
Issues:
1. Discrepancy in TDS credit granted by the Assessing Officer. 2. Application of Rule 37BA to treat gross sale proceeds as income. 3. Interpretation of Circular No. 452 regarding turnover calculation for commission agents. Analysis: Issue 1: Discrepancy in TDS credit The appeal was against the order of the Ld. Addl/JCIT (Appeals) regarding the credit for TDS granted by the Assessing Officer under Section 143(1) of the Income Tax Act, 1961 for the Assessment Year 2022-23. The appellant, a commission agent, declared a total income of Rs. 15,04,640/- and claimed TDS credit of Rs. 2,62,240. However, the Assessing Officer only granted credit for Rs. 88,381. The appellant contended that the entire amount of Rs. 1,38,128 deducted as tax at source under Section 194Q should be credited. The Tribunal held in favor of the appellant, directing the Assessing Officer to grant credit for the entire TDS amount. Issue 2: Application of Rule 37BA The appellant argued that as a commission agent, the gross sale proceeds should not be considered as their income, challenging the application of Rule 37BA of the Income Tax Rules, 1962. The Tribunal noted that Circular No. 452 issued by the CBDT clarified that for commission agents like the appellant, turnover includes only the gross commission and not sales on behalf of principals. Therefore, the Tribunal concluded that the appellant, being a licensed commission agent, should be treated as an agent (kaccha arahtia) and is entitled to credit for the entire TDS amount deducted at source. Issue 3: Interpretation of Circular No. 452 The Tribunal extensively analyzed the CBDT Circular No. 452, dated 17th March, 1986, which specified the turnover calculation for commission agents. By referring to the Circular's provisions, the Tribunal established that for kaccha arahtias like the appellant, turnover comprises only the gross commission, not sales on behalf of principals. This interpretation guided the Tribunal's decision to allow the appeal and direct the Assessing Officer to grant full credit for the TDS amount deducted at source. In conclusion, the Tribunal ruled in favor of the appellant, setting aside the orders of the Revenue Authorities and directing the Assessing Officer to credit the entire TDS amount deducted at source. The judgment highlighted the specific application of Circular No. 452 in determining turnover for commission agents, emphasizing the distinction between gross commission and sales proceeds on behalf of principals.
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