2024 (8) TMI 980 - AT - Income Tax

Denial of Credit of TDS - credit for entire amount as deducted as tax at source u/s. 194Q from the commission income that was deducted as tax at source u/s. 194A of the Act from interest income - AR submitted that as per the Circular No.452, dated 17th March, 1986 issued by the Central Board of Direct Taxes CBDT the actual turnover of the Kaccha Aarahtias is the commission charged and it does not include the sales affected on behalf of the principals HELD THAT - As gone through the CBDT Circular No. 452, dated 17th March, 1986 relied upon assessee and case of Yagneswari General Traders 2024 (3) TMI 1344 - ITAT VISAKHAPATNAM 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 f act 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 (supra) squarely 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. Appeal of the assessee is allowed.

Summary

Issues:
Appeal against order of Ld. Addl/JCIT (Appeals)2, Mumbai regarding TDS credit disallowance for AY 2023-24.

Detailed Analysis:
1. The appeal was filed against the order of the Ld. Addl/JCIT (Appeals)2, Mumbai, regarding the disallowance of TDS credit for the AY 2023-24 under section 143(1) of the Income Tax Act, 1961.
2. The appellant, an individual and licensed chillies commission agent, declared a total income of Rs. 28,94,330/- and claimed TDS credit of Rs. 1,07,543/- in the return filed. However, the Ld. AO granted TDS credit only for Rs. 8,053/-, disallowing Rs. 99,490/- and issued an Intimation under section 143(1) on 11/12/2023.
3. Grounds of appeal raised by the appellant included contentions that the Ld. CIT(A) erred in not granting credit for the entire TDS amount deducted under sections 194Q and 194A of the Act, and that the appellant, being a commission agent, should not have the gross sale proceeds treated as income.
4. The Authorized Representative argued that as per CBDT Circular No.452, the turnover for commission agents should only include the commission charged, not the sales on behalf of principals. The AR relied on a previous Tribunal decision favoring the appellant in a similar case.
5. The Departmental Representative supported the Ld. Revenue Authorities' orders.
6. The Judicial Member analyzed the CBDT Circular and the previous Tribunal decision, concluding that the appellant, being a licensed commission agent, should be considered an agent (kaccha arahtia) and is entitled to credit for the entire TDS amount deducted. The orders of the Ld. Revenue Authorities were set aside, and the AO was directed to grant the full TDS credit.
7. The decision was influenced by the consistency principle with a previous Tribunal ruling, and the appeal of the assessee was allowed.

This judgment highlights the importance of correctly interpreting tax laws and circulars to determine the eligibility of TDS credit for individuals like commission agents. The decision emphasizes the need for uniformity in applying legal principles across similar cases to ensure fairness and consistency in tax assessments.