Lakshmi General Stores Vs ITO (ITAT Visakhapatnam)
The assessee, a licensed chillies commission agent operating in the Agricultural Market Yard (AMCY), Guntur, filed appeals before the Tribunal challenging separate orders of the CIT(A) for assessment years 2022-23 and 2023-24. The assessee is registered under the Andhra Pradesh Agricultural Produce and Livestock Markets Act, 1966 and earns a 2% commission from farmers on sales made to licensed buyers, traders, and exporters. Only commission income is treated as taxable income, although traders deducted TDS under Section 194Q on the entire sale value and under Section 194A on delayed payment interest, with all deductions reported in the assessee’s PAN.
For A.Y. 2022-23, the assessee filed a return declaring income of ₹11,98,880 and claimed TDS credit of ₹1,06,350 based on Form 26AS. The CPC processed the return under Section 143(1) and allowed only proportionate TDS credit of ₹6,06,915, determining tax payable at ₹1,15,920. The CPC held that under Section 199 read with Rule 37BA(2), TDS credit must correspond to income offered for taxation and that the assessee had offered only commission income, not total sales.
The assessee appealed, arguing that it acts only as a commission agent and that although TDS was deducted on the entire sale value, all income relating to those transactions—namely commission and interest—had been offered to tax. It further contended that the deduction of TDS on full sale value was beyond its control, as traders reported the transactions in its PAN. The CIT(A) upheld the CPC’s view, holding that the assessee should have either obtained TDS certificates in the names of the farmers or filed declarations with deductors to correct TDS reporting. According to the CIT(A), proportionate TDS credit was justified as per Section 199 and Rule 37BA(2).
