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

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ITA 192/CHANDI/2026Status: DisposedITAT Chandigarh20 July 2026AY 2023-20244 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to full TDS credit as it represents the assessee's money deducted by payers/banks, irrespective of whether the gross receipts were offered to tax. The nature of the assessee's business as a commission agent was crucial.

What were the facts?

The assessee, acting as a commission agent for agricultural produce auctions, claimed TDS credit on gross auction receipts and cash withdrawals. The CPC and CIT(A) denied credit for the portion of TDS not corresponding to the offered commission income, citing Rule 37BA.

What were the issues?

Whether TDS credit can be denied solely on the ground that gross receipts on which TDS was deducted were not fully offered to tax as income, when the assessee acted as a commission agent.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH

Heard together (2 matters)

ITA No.191/CHANDI/2026
ITA No.192/CHANDI/2026

Read from the judgment's own cause title. This page is filed under one of them.

1.

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.

2.

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.

3.

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.

4.

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.

5.

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

आदेश की "ितिलिप अ"ेिषत /Copy of the Order forwarded to : 1. अपीलाथ"/Appellant

2.

""थ"/Respondent 3. आयकरआयु"/CIT 4. िवभागीय"ितिनिध/DR 5. गाड"फाईल/GF

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