Case Law Details
Sravan Kumar Traders Vs ITO (ITAT Visakhapatnam)
ITAT Vishakhapatnam held that in case of licensed chillies commission agent turnover includes only gross commission and not the sales effected on behalf of their principals. Accordingly, credit of entire amount of deducted at source granted.
Facts- The assessee is an individual and a licensed chillies commission agent in Agricultural Market Yard Committee [AMYC], Guntur. The assessee filed its return of income for the AY 2022-23 declaring a total income of Rs. 3,38,520/- wherein the assessee claimed TDS credit for Rs. 60,652/-. Thereafter, AO, CPC while processing the return of income U/s. 143(1) of the Act granted TDS only to the extent of Rs. 3,974/- and disallowed the TDS credit of Rs. 56,678/- and passed the intimation U/s. 143(1) of the Act on 17/02/2023.
Aggrieved by the Intimation, the assessee filed an appeal before Addl / JCIT (A), Vadodara. However the appeal was dismissed. Being aggrieved, the present appeal is filed.
Conclusion- Tribunal in the case of Yegneswari General Traders vs. ITO has held that based on CBDT circular no. 452 it is clear 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, 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.
Held that considering the identical facts and circumstances of the assessee’s case with that of the appeal decided by the Tribunal in the case of Yagneswari General Traders vs. ITO and in the case of Thota Venkateswarlu vs. ITO, following the principle of consistency, we have 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. Thus, the grounds raised by the assessee are allowed.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
This appeal filed by the assessee is against the order of the Ld. Addl.CIT/JCIT(A)-2, Vadodara in DIN & Order No. ITBA/APL/S/ 2 5 0 / 2 0 2 4-2 5 / 1067060634(1), dated 26/07/2024 arising out of the order passed U/ s. 143(1) of the Income Tax Act, 1961 [“the Act” ] for the AY 2022-23.
2. Briefly stated the facts of the case are that the assessee is an individual and a licensed chillies commission agent in Agricultural Market Yard Committee [AMYC], Guntur. The assessee filed its return of income for the AY 2022-23 on 07/09/2022 declaring a total income of Rs. 3,38,520/- wherein the assessee claimed TDS credit for Rs. 60,652/-. Thereafter, the Ld. AO, CPC while processing the return of income U/s. 143(1) of the Act granted TDS only to the extent of Rs. 3,974/- and disallowed the TDS credit of Rs. 56,678/- [Rs. 60,652 – Rs. 3,974] and passed the Intimation U/s. 143(1) of the Act on 17/02/2023. Aggrieved by the Intimation of the Ld. AO, CPC passed U/s. 143(1) of the Act, the assessee filed an appeal before the Ld. Addl / JCIT (A), Vadodara. On appeal, after considering the submissions of the assessee, the Ld. Addl/ JCIT (A), dismissed the appeal of the assessee. On being aggrieved, the assessee filed the present appeal before the Tribunal by raising the following grounds of appeal:
“1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case.
2. The Ld. CIT(A) ought to have directed the CPC to grant credit for entire amount of Rs. 36,794/- that was deducted as tax at source U/s. 194Q of the Act from the commission income.
3. The Ld. CIT(A) ought to have appreciated that the appellant is only a commission agent and therefore the CPC is not justified in applying Rule 37BA by treating the gross sale proceeds as the income of the appellant.
4. Any other grounds may be urged at the time of hearing.”
3. At the outset, the Ld. Authorized Representative [AR] submitted that the assessee is only a commission agent and therefore the total gross sale proceeds cannot be treated as the income of the assessee and thereby the Ld. Revenue Authorities have erred in applying the Rule-37BA of the Income Tax Rules, 1962. The Ld. AR also 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. The Ld. AR strongly relied on the Board Circular (supra) and reiterated that 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 & 194A of the Act and therefore pleaded that the grounds raised by the assessee may be allowed. The Ld. AR further submitted that on identical facts and circumstances, the Hon’ble Tribunal has decided the case in favour of the assessee in the case of Thota Venkateswarlu vs. ITO in ITA No. 290/Viz/2024 (AY 2023-24), dated 27/08/2024. Therefore, the Ld. AR strongly relied on the decision of this Bench (supra) and pleaded that considering the similar facts and circumstances, the decision taken by the Bench in the case of Thota Venkateswarlu vs. ITO (supra) may be applied to the case of the assessee also.
4. On the other hand, Ld. Departmental Representative [DR] strongly relied on the orders of the Ld. Revenue Authorities and argued in support of the same.
5. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. We have also gone through the CBDT Circular No. 452, dated 17th March, 1986 (supra) relied on by the Ld. AR. Further, we have also perused the decision of this Tribunal in the case of Thota Venkateswarlu vs. ITO (supra) wherein the Tribunal has relied on the decision of this Bench in the case of Yegneswari General Traders vs. ITO in ITA No. 39/Viz/2024 (AY 2022-23) dated 18/03/2024. For the sake of reference, the relevant paras 5 & 6 of the Tribunal’s order dated 18/03/2024 (supra) are extracted herein below:
“5. I have heard both the sides and perused the material available on record as well the orders of the Ld. Revenue Authorities. I have also gone through the CBDT Circular No. 452, dated 17th March, 1986 (supra) relied on by the Ld. AR. For the sake of reference, the relevant portion of paragraph No.4 of the said Circular (supra) is extracted herein below:
“4. The Board are advised that so far as kaccha arahtias are concerned, the turnover does not include the sales effected on behalf of the principals and only the gross commission has to be considered for the purpose of 44AB. But the position is difference with regard to paccaarahtias………”
6. From the above it is clear 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 (supra) squarely applies to the assessee and hence I am of the view that 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. Accordingly, I hereby set-aside the orders of the Ld. 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.”
6. Considering the identical facts and circumstances of the assessee’s case with that of the appeal decided by the Tribunal in the case of Yagneswari General Traders vs. ITO (supra) and in the case of Thota Venkateswarlu vs. ITO (supra), following the principle of consistency, we have 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. Thus, the grounds raised by the assessee are allowed.
7. In the result, appeal of the assessee is allowed.
Pronounced in the open Court on 05th November, 2024.
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