Koti Narasimha Srinivas Vukkurthi Vs ITO (ITAT Visakhapatnam)
Income Tax Appellate Tribunal (ITAT) Visakhapatnam has ruled in favor of Koti Narasimha Srinivas Vukkurthi, a commission agent, settling a dispute over the calculation of turnover and the subsequent claim of Tax Deducted at Source (TDS) credit. The decision overturns previous orders from the Central Processing Centre (CPC) and the Commissioner of Income Tax (Appeals), which had restricted the assessee’s TDS credit, leading to a legal challenge.
Background of the Case
Koti Narasimha Srinivas Vukkurthi operates as a commission agent, or ‘Kaccha Arahtia,’ selling chillies on behalf of farmers to registered dealers. For the Assessment Year 2022-23, the assessee filed an income tax return reporting a total income of approximately Rs. 10.51 lakh and claimed a TDS credit of Rs. 48,593. However, the CPC processed the return, allowing a credit of only Rs. 10,271. The tax authorities contended that the assessee’s income included the total gross sales proceeds from the chillies, rather than just the commission earned. This resulted in a shortfall in the TDS credit.
The assessee argued that as a commission agent, his actual turnover was limited to the commission he received, which was approximately Rs. 34.50 lakh, and not the total sales value of the goods he facilitated. He claimed that the revenue authorities had incorrectly applied tax rules and failed to recognize the fundamental difference between a commission agent’s role and that of a principal seller.
