AMAR NATH GARG,SIRSA vs. INCOME TAX OFFICER, WARD-1, SIRSA

Aforesaid appeals by assessee for captioned Assessment Years (AY) have identical facts. First, I take up appeal for AY 2021-22 which arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Hyderabad [CIT(A)] dated 30.12.2025 in the matter of a rectification intimation issued by CPC u/s 154 on 15.03.2023. The sole issue that arises for my consideration is denial of tax credit for Rs.1,08,104/-. Having heard rival submissions, the appeal is disposed-off as under.

The assessee’s return of income was processed u/s 143(1) on 22.06.2022 accepting returned income. The assessee preferred rectification u/s 154 which stood disposed-off on 15.03.2023 wherein TDS credit was reduced from Rs.2,31,593/- to Rs.1,23,489/-. The assessee’s appeal against the same stood dismissed on the ground that assessee’s business income represents commission income only whereas TDS was deducted on gross auction receipts. In terms of Rule 37BA, TDS credit could be granted only to the extent corresponding income was offered to tax. Aggrieved, the assessee is in further appeal before Tribunal.

From case records, it emerges that the assessee is sengaged as commission agent i.e., Kachha Arhatia for auction sales of agriculture produce. The assessee receives commission from the buyers and auction sale proceeds so received by the assessee are paid to agriculturists. The auction sales thus do not constitute turnover of the assessee and accordingly, these sales do not have any element of income for the assessee. However, TDS has been deducted on these transactions u/s 194N, the credit of which has been claimed by the assessee. On cash withdrawals from Banks, more TDS has been deducted by banks u/s 194NF, the credit of which was also claimed by the assessee. The same was denied by CPC and upheld by Ld. CIT(A) invoking Rule 37BA overlooking the fact that the assessee has acted as a Kachha Arhatia only. The assessee receives payment on behalf of the others and offers commission from such activity. Thus, the full gross receipts as reflected in Form 26AS may not be offered to tax since only commission income would constitute revenue for the assessee. The differential receipts would never be offered to tax as revenue receipts. Nevertheless, TDS has been deducted against assessee’s payment and it is the assessee’s money which has been deducted by the payers / bank. Therefore, the credit of the same would certainly be available to the assessee. The turnover or other financial results are not in dispute. The provisions under which TDS has been deducted would not hold much relevance in such a case. Therefore, CPC is directed to grant full TDS credit to the assessee as available in Form 26AS. The appeal stand allowed.

Similar are the facts in AY 2023-24 wherein TDS credit has been restricted by CPC. Facts being pari-materia the same, I direct CPC to grant full TDS credit to the assessee.

Both the appeals stand allowed. Order pronounced on 20th July, 2026. - (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER AS Dated: 20/07/2026

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