LAKSHMI SAI TRADERS,GUNTUR vs. INCOME TAX OFFICER, WARD-1(1), GUNTUR

PER DUVVURU RL REDDY, Judicial Member :

2 of the Income Tax Act, 1961 [“the Act”]. Since both the appeals pertain to one assessee and the issues involved in these appeals are similar in nature, these two appeals are clubbed, heard together and disposed of in this consolidated order. Appeal wise adjudication is given in the following paras.

ITA No. 334/Viz/2024 (AY 2022-23)

“1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case.

2. The Ld. CIT(A) ought to have directed the Assessing Officer to grant credit for entire amount Rs. 1,47,903/- that was deducted as tax at source U/s. 194Q of the Act from the commission income.

3. The Ld. CIT(A) ought to have appreciated that the appellant is only a commission agent and therefore the CPC is not justified in applying Rule 37BA by treating the gross sale proceeds as the income of the appellant.

4. Any other grounds may be urged at the time of hearing.”

4 Circular (supra) and reiterated that since the assessee is only a commission agent, the assessee is eligible to get credit of the entire amount deducted as tax at source U/s. 194Q of the Act and therefore pleaded that the grounds raised by the assessee may be allowed. The Ld. AR further submitted that on the identical facts and circumstances, the Hon’ble Tribunal has decided the case in favour of the assessee in the case of Yagneswari General Traders vs. ITO in (AY 2022-23, dated 18/03/2024 and also the decision of SMC Bench of this Tribunal in the case of Thota Venkateswarlu vs. ITO in dated 27/08/2024. Therefore, the Ld. AR strongly relied on the decisions of this Bench (supra) and pleaded that considering the similar facts and circumstances, the decision taken by the Bench in the case of Yagneswari General Traders vs. ITO (supra) and in the case of Thota Venkateswarlu (supra) may be applied to the case of the assessee also.

5 Authorities. We have also gone through the CBDT Circular No. 452, dated 17th March, 1986 (supra) relied on by the Ld. AR. Further we have perused the decision of this Tribunal in the case of Yagneswari General Traders vs. ITO (supra). For the sake of reference, the relevant paras 5 & 6 of the Tribunal’s order dated 18/03/2024 (supra) are extracted herein below: “5. I have heard both the sides and perused the material available on record as well the orders of the Ld. Revenue Authorities. I have also gone through the CBDT Circular No. 452, dated 17th March, 1986 (supra) relied on by the Ld. AR. For the sake of reference, the relevant portion of paragraph No.4 of the said Circular (supra) is extracted herein below: The Board are advised that so far as kaccha “4. 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 44AB. But the position is difference with regard to pacca arahtias……….”

6. From the above it is clear that Kaccha Arahtias turnover includes only the gross commission and not the sales effected on behalf of their principals. In the present case, it is a fact that the assessee is only a licensed commission agent in Agricultural Market Committee Yard, Guntur which is formed under the rules and regulation of the Government of Andhra Pradesh. Therefore, the Circular issued by the CBDT (supra) squarely applies to the assessee and hence I am of the view that the assessee is acted only as an agent (kaccha arahtia) and therefore it is eligible to get credit of the entire amount deducted as tax at source and there is no short fall of TDS as concluded by the Ld. Revenue Authorities. Accordingly, I hereby set-aside the orders of the Ld. Revenue Authorities and direct the Ld. AO to grant credit of the entire amount deducted as tax at source in the case of the assessee. The grounds raised by the assessee are allowed.”

Pronounced in the open Court on 09th October, 2024.

Sd/- Sd/- (एस बालाकृ�णन) (दु�वू� आर.एल रे�ी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सद�य/ACCOUNTANT MEMBER �याियकसद�य/JUDICIAL MEMBER Dated : 09/10/2024 OKK - SPS आदेश की �ितिलिप अ�ेिषत /Copy of the order forwarded to:- 1. िनधा�रती/ The Assessee – Lakshmi Sai Traders, D.No. 23-11-39(114), Eluru Bazar, Guntur, Andhra Pradesh – 522003. 2. राज�व/The Revenue – the Income Tax Officer, Ward-1(1), O/o. ITO, Lakshmipuram Main Road, Guntur, Andhra Pradesh-522006.