RAMPARKASH CHIMANLAL,DHAN MANDI vs. ITO WARD(1)RJN-W(570)(92), SRIGANGANAGAR

At the outset, the Ld. Counsels for these Appellant submitted that assessee is engaged in the business of sale of agriculture crop produce on behalf of farmers on commission basis, commonly known as Kachhi Arhatiya,

He further submitted that as per CBDT circular a kachha arahtia acts only as an agent of his constituent i.e. farmer and never acts as a principal. The remuneration of a kachha arahtia consists solely of commission and he is not interested in the profits and losses made by his constituent, as the kachha arahtia, does not have any dominion over the goods. The Board has advised that so far as kachha 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 section 44AB. In the case of agents whose

In the present cases, the CPC while processing the Return of Income u/s 143(1) of the Act, has accepted Returned income but it has restricted the claim of TDS by disallowing the claim of TDS of Rs. 51,937/- claimed by the appellant on the ground that gross receipts as per form 26AS is more than that what were shown in the ITR, due to TDS deducted by the buyer under section 194Q of the Income Tax Act. It is contended by the Ld. AR that Buyer has deducted TDS under section 194Q on the purchase value of crop of the farmer purchased through kacha arhtiya, and it is not the sale or turnover of the kacha arthia, and actually it was sale of the farmer. The Ld. AR pleaded that considering the legal and factual position, the assessee is entitled for credit of whole amount of TDS as claimed in the ITR for the respective assessment years and requested to allow credit of the TDS to the assessee being kacha arhtia as a covered matter by Tribunal decisions.

On the other hand, the Ld. Addl. CIT Sr. DR relied on impugned Order. He contended that matter is covered in favour of Revenue by Coordinate Jodhpur Bench Decision in the case of “Jagdish Rai Goyal Vs. ITO Hanumangarh” in ITA Nos. 276 & 386/Jodh/2025 Asst. years 2022-23 & 2023-24 dated 25.11.2025

Having heard both the sides and perusal of record, we find that AO/CPC has not allowed the full credit of the TDS due to the mismatch of total receipt in ITR and that shown in Form-26AS. In this respect, appellant in his submission before Ld. CIT(A) and before us has submitted that the appellants are "Kaccha Arhatia" and also registered with Rajasthan Krishi Upaj Mandi and works as a middleman. As per the Circular No. 452(F.No. 201/3/85-/T(A-//)], dated 17.03.1986) the aforesaid Kaccha Arhatia acts only as an agent of his constituent and never acts as a principal.

It is pertinent to mention that in the present case the appellants are kachha arahtia who claimed to be engaged in selling crops on behalf of farmers there only gross commission has to be considered for the purpose of computing the turnover in the light of aforementioned CBDT Circular 452 of 1986 dated 17.03.1986 while computing tax liability. It is clarified that the short credit of TDS granted in respect of TDS deducted against their own PAN is dependent upon filing of TDS statement by the assessee as mandated u/s 199 and rule 37BA(1). In view of that matter, the assessee may be allowed due liberty to get the TDS statement rectified by getting appropriate corrections

The coordinate Delhi Bench (Supra) observed that the appellant should not get benefit of Tax erroneously deducted by the Payer in as much as the assessee has not shown the same as its income/receipts viz-a-viz the turnover shown in form No. 26AS.

In the light of the CBDT Circular 452 of 1986 dated 17.03.1986, we deem it appropriate to direct the AO to examine and verify the contents of the Form 26AS at the time of giving appeal effect and give credit of TDS mismatch if any, to these appeals of assesse.

In the backdrop of the aforesaid discussion, both these appeals of the assessee are allowed for statistical purposes.