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TMI Blog2024 (11) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the appellant was a 'kacha adatiya' the purchase value on which tax was deducted u's 194Q by buyers (Principal) was not shown as turnover of the appellant, and only commission earned on such value was credited as income. TDS refused thus deserves to be fully allowed. 3. That Ld. CIT(A)-NFAC has further grossly erred in confirming the refusal of TDS claimed by observing that if the assessee was a commission agent the TDS ought to have been deducted u/s 194J of the Act and not see 1940. Appellant prays that such observation being absolutely incorrect, as the TDS for commission income earned is covered under sec 194H of the Act. Further due TDS us 194H of the Act is duly deducted by the buyers who have also deducted TDS on the purchase value by virtue of sec 1940. Appellant prays that TDS claimed deserves to be fully allowed.'' 2.1 As per the facts of the case, the assessee is a "Kaccha Aaratiya" engaged in selling agriculture produce on behalf of the farmer to the principal buyer. Return of income for the year under consideration was filed in ITR 3, claiming a TDS of Rs. 2,33,682/- under various sections. However while processing ITR under section 143(1) a demand of Rs. 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e event the income so declared for each nature of receipt on which TDS has been claimed, is lesser than that appearing in Form 26AS, then only CPC may deny the credit of TDS for relevant nature of receipt resultantly. In view of above since the receipt of Interest and commission on which TDS have been claimed under sections - 194A and 194H are fully declared in ITR i.e. either with same or higher amount than that appearing in Form 26AS, the entire TDS claimed u/s 194A and 194H deserves to be fully allowed. Hence the proportionate TDS disallowed to the extent of Rs.1,79,551/- (Rs.2,09,560 - Rs.30,009) i.e. TDS claimed u/s 194Q) is absolutely unjustified and incorrect which deserves to be allowed to the assessee. Therefore, disallowance of TDS to the extent of Rs. 1,79,551/- being incorrect and bad in law may please be directed to be allowed and the assessee prays accordingly. As regards the balance TDS credit of Rs. 30,009/- being TDS u/s 194Q, the assessee humbly submits that the same also deserves to be fully allowed as: Fact that assessee is a 'Kachaa Arhatiya' is duly accepted by CIT(A) (para 6.2.6 page 11 of CIT order). Turnover on which TDS is deducted u/s 194Q is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n) being duly offered for tax by the assessee in his ITR, the TDS deducted both u/s 194H and 194Q deserves to be fully allowed. E. Further the Form 26AS also depicts that the invoices on which TDS have been deducted u/s 194Q also has TDS deducted u/s 194H of the Act. Thus the contention of the assessee that he is merely a 'kachaa arhatia' is potrayed beyond all doubts and needs to be accepted. Further Honble ITAT Jaipur bench vide its order dated 30.04.2024 in ITA no. 192/JPR/2024, on exactly same issue has fully allowed the TDS claimed u/s 194Q by kachaa arhatia . (copy of order duly filed with the bench). Thus the entire TDS claimed by assessee deserves to be fully allowed and the assessee prays accordingly. Alternatively, the assessee also contends that the seller whose goods are facilitated by the assessee are farmers, whose income is exempt u/s 10(1) of the Act. Thus by virtue of clarifications issued by CBDT in its circular no. 13 of 2021 wherein it has been stated as under:- "To remove difficulty, it is clarified that the provisions of section 194Q of the Act shall not apply on purchase of goods from a person, being a seller, who as a person is exempt from income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deny the credit of TDS for relevant nature of receipt. Therefore keeping in view my above discussion, I am of the view that since the receipt of interest and Commission on which TDS has been claimed under section 194A and 194 H are fully declared in ITR, therefore the entire TDS claimed under section 194a and 194 h needs to be fully allowed. Hence the proportionate TDS, disallowed to the extent of rupees 179551, is absolutely unjustified and therefore deserves to be allowed and thus, we order accordingly. 2.7 As regards the balance TDS credit of Rs 30,009/- being TDS under section 194 Q is concerned. In this regard after hearing the parties at length, the Bench found that it is an undisputed fact that Assessee is a Kacha Aaratiya as has already been accepted by learner CIT appeal. Therefore turnover on which TDS is deducted under section 194 Q is not the turnover of the assessee hence has rightly not been shown as such by the assessee. Moreover a kaccha Aaratiya acts only as an agent for his constituent and never acts as principal, therefore the remuneration of Kaccha Aaratiya consists solely of commission and he has no control on the profit and losses made by his constituents. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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