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Facts
The assessee, a Kachha Arthia, filed its return of income for commission earned. It challenged the CIT(A)'s order which denied full credit for TDS appearing in Form 26AS, arguing that the TDS was erroneously deducted by purchasers on sales belonging to agriculturists/farmers, not the assessee, thus they were not liable for tax on that alleged income.
Held
The Tribunal upheld the CIT(A)'s decision, stating that while the assessee is a Kachha Arthia and CBDT Circular No. 452 applies, the assessee is not entitled to credit for tax erroneously deducted by the payer when the corresponding income has not been offered for tax. The Tribunal noted that Section 199 and Rule 37BA(2) require the income and TDS credit to pertain to the same person, which was not the case here, and the assessee failed to take corrective actions.
Key Issues
Whether a Kachha Arthia can claim credit for TDS deducted by purchasers on sales belonging to third-party agriculturists, when the assessee has not shown the corresponding income in their return.
Sections Cited
Section 199, Rule 37BA(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the ld.
CIT(A) - 8, Mumbai dated 15.12.2023 pertaining to A.Y 2022-23.
The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in not allowing credit of TDS deducted at source by the purchaser ignoring the fact that the assessee is only a Kachha Arthia and, therefore, not liable to pay tax on the alleged income.
Briefly stated, the facts of the case are that the assessee being a Kachha Arthia, filed its return of income for commission earned by it.
The total turnover of commission shown by the assessee was Rs. 15,78,693/-. However, taking a leaf out of Form No. 26AS, proportionate credit of TDS was allowed to the assessee.
When the matter was agitated before the ld. CIT(A), the ld. CIT(A) held as under:
The ld. counsel for the assessee vehemently stated that being a Kachha Arthia, the assessee is not liable. Strong reliance was placed on CBDT Circular No. 452 dated 17.03.1986.
Per contra, the ld. DR supported the findings of the ld. CIT(A).
I have carefully considered the orders of the authorities below.
There is no dispute that the assessee is a Kachha Arthia and CBDT Circular No. 452 squarely applies. However, I am of the considered opinion that the assessee 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.
In my considered opinion, the findings of the ld. CIT(A) mentioned elsewhere do not call for any interference.
In the result, the appeal of the assessee in is dismissed.
The order is pronounced in the open court on 27.03.2024