GORLA SRINIVASA REDDY,GUNTUR vs. INCOME TXA OFFICER, WARD-1(1), GUNTUR

The brief facts are that, the Appellant had filed his return of income for the relevant assessment year on 30.09.2023 by declaring total income of I.T.A.No.503/VIZ/2024 Gorla Srinivasa Reddy Rs.19,47,960/-. The Appellant had received a notice claiming that the receipts found in Form No. 26AS are not fully disclosed in the Income Tax Return. Subsequently the Appellant received the intimation under section 143(1) of the Act on 11.12.2023 disallowing the TDS credit of Rs. 1,40,557/-. The principal issue which arose in the appeal is “whether the appellant was Trader (Pucca Arahatia) or commission Agent (Kachha Arhatia)”. The appellant happens to be a licensed chilli commission agent in the Guntur Agriculture Market Yard. The appellant had received interest from the Traders under section 194A of the Act for delay in payment and commission from sale of chillies and the same was offered to tax. The traders had deducted TDS on sale value. According to the appellant the only commission which the appellant earns is 2% on the total sales.

We have heard the parties and perused record.

A perusal of Para 4.1 of the impugned order passed by the JCIT(Appeals) shows that the First Appellate Authority has accepted the contention on behalf of the Appellant that he is only acting as a commission agent. However, in the subsequent Para 4.2 the JCIT(Appeal) has recorded a contrary conclusion that appellant is a Trader and not a broker / commission agent as claimed.

On behalf of the appellant reliance is placed on the decision of the Coordinate Bench in the case of Sri Sai Kiran Traders v. ITO in decided on 30.10.2024, wherein the Coordinate Bench Page No. 2

I.T.A.No.503/VIZ/2024 Gorla Srinivasa Reddy of this Tribunal relying on its earlier decision in the case of Thota Venkateswarlu v. ITO in decided on 27.08.2024 and Yegneswari General Traders v. ITO in decided on 18.03.2024 have held that the assessee were acting as Kachha Arhatia and were earning only gross commission. The Decision relied upon had in turn placed reliance on a CBDT Circular No. 452 dated 17.03.1986.

Ld. Sr. AR on behalf of the revenue in all fairness submitted that if the facts as obtaining in the present appeal would be covered by the decision in the case of Sri Sai Kiran Traders v. ITO supra. In that view of the matter and particularly in view of the fact that in Para 4.1 even the First Appellate Authority has accepted that the Appellant was only a commission agent. We find that the impugned decision cannot be sustained. In the result, the appeal is allowed and direct the AO/CPC to grant TDS to the appellant as claimed in the return of income filed by the assessee.

In the result, appeal is allowed in the aforesaid terms.

Sd/- Sd/- (न्यायमूर्ति (सेवा र्िवृत्त) सी.वी. भडंग) (एस बालाकृष्णन) (JUSTICE (RETD.) C.V. BHADANG) (S. BALAKRISHNAN) अध्यक्ष /PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER Dated:20.12.2024 Giridhar, Sr.PS