2024 (11) TMI 388 - AT - Income Tax

Denial of TDS credit - eligibility to to get credit of the entire amount deducted as tax at source u/s. 194Q 194A - AR submitted that the assessee is only a commission agent HELD THAT - As per case of Yagneswari General Traders 2024 (3) TMI 1344 - ITAT VISAKHAPATNAM and in the case of Thota Venkateswarlu 2024 (8) TMI 1478 - ITAT VISAKHAPATNAM following the principle of consistency wherein held as the 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. No hesitation to set-aside the orders of the Ld. Revenue Authorities and direct the Ld. AO - CPC to grant credit of the entire amount deducted as tax at source in the case of the assessee. Appeal of the assessee is allowed.

Summary

Issues:
Appeal against order of Ld. Addl.CIT/JCIT(A)-2, Vadodara regarding TDS credit for AY 2022-23.

Analysis:
The appeal was filed by the assessee against the order of the Ld. Addl.CIT/JCIT(A)-2, Vadodara, pertaining to the TDS credit for the Assessment Year (AY) 2022-23. The assessee, an individual and licensed chillies commission agent, had filed a return of income declaring a total income of Rs. 3,38,520/- with a TDS credit claim of Rs. 60,652/-. However, the Ld. AO, CPC granted TDS credit only for Rs. 3,974/- and disallowed the remaining amount of Rs. 56,678/-. The appeal was dismissed by the Ld. Addl/JCIT (A), leading to the present appeal before the Tribunal.

The primary contention raised by the assessee was that since they were solely a commission agent, the total gross sale proceeds should not be considered as their income. The assessee argued that as per Circular No. 452 issued by CBDT, the turnover of commission agents does not include sales on behalf of principals. The assessee relied on a previous Tribunal decision in a similar case to support their claim for TDS credit for the entire amount deducted under sections 194Q and 194A of the Income Tax Act.

The Departmental Representative, on the other hand, supported the orders of the Revenue Authorities. After hearing both sides and examining the relevant material, including the CBDT Circular and previous Tribunal decisions, the Tribunal found merit in the assessee's argument. The Tribunal noted that as a licensed commission agent, the assessee fell under the category of "kaccha arahtia," where turnover includes only gross commission and not sales on behalf of principals. Therefore, the Tribunal set aside the orders of the Revenue Authorities and directed the Ld. AO to grant credit for the entire amount deducted as tax at source to the assessee.

In conclusion, the Tribunal allowed the appeal of the assessee, citing consistency with previous decisions and the specific nature of the assessee's role as a commission agent. The judgment was pronounced on 5th November 2024.