In a recent case, the Vishakapatanam bench of the Income Tax Appellate Tribunal ( ITAT ) directed the department to grant full TDS credit to the assessee as he is a commission agent. It noted the Central Board of Direct Taxes ( CBDT ) circular stating that the actual turnover of Kaccha Aarahtias is the commission charged and it does not include the sale affected on behalf of the principals.
In this case, the assessee, Subba Reddy Maraeddy, is carrying business as a commission agent by selling chilies on behalf of farmers under the name of M/s. Amarrnath Chillies Traders. The assessee filed the Income Tax Returns (ITR) for the assessment year (AY) 2022-23 on 21-09-2022, declaring a total income of Rs. 9,35,130.
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While processing the income file under Section 143(1) of the Income Tax Act, 1961, the assessing officer (AO) granted TDS only to the amount of Rs. 3,073, but Rs. 1,24,286 was claimed by the assessee in the ITR filed.
The Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the appeal filed by the assessee. Thus, the assessee approached the ITAT for relief.
It was contended by the counsel on behalf of the assessee that the total sale proceeds cannot be treated as income of the assessee because the assessee is only a commission agent. The counsel relied on the judgement of the tribunal in the case of Thota Venkateswarlu vs. ITO which consists of identical facts and circumstances, and the bench had decided the case in favour of the assessee.
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The bench by relying on the decision of the tribunal in the case of Thota Venkateswarlu vs. ITO allowed the grounds raised by the assessee and held that CBDT Circular No. 452, dated 17-03-1986 squarely applies in this case.
The tribunal held that the assessee is only a licensed commission agent and directed the department to grant credit of the entire amount deducted as tax at source in the case of the assessee
The bench, comprising K. Narasimha Chary (Judicial Member) and S. Balakrishnan (Accountant Member) allowed the appeal filed by the assessee.
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