TDS credit for commission agent upheld where apparent turnover belonged to principals, not the agent's own business.

A commission agent acting as a Kachcha Arhtia was held entitled to TDS credit where the purchases and sales were undertaken on behalf of principals, invoices were raised for identical amounts, and the assessee earned only commission. The apparent sale value represented principal transactions, not the assessee's own trading turnover, so its omission from the assessee's audited turnover could not justify denial of credit under section 194Q. The objection based on sections 37BA and 199 was not sustainable on these facts, and the assessee's claim for TDS credit was accepted.

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Issues: Whether the assessee, acting as a Kachcha Arhtia and commission agent, was entitled to credit of tax deducted at source under section 194Q despite the corresponding turnover not being reflected as its own turnover.

Analysis: The assessee's business model showed that the purchases and sales were carried out on behalf of principals, with invoices raised for identical amounts and the assessee earning only commission. Tax was separately deducted on the commission under section 194H and on the purchase transaction under section 194Q. Since the sale value reflected in the invoices represented transactions undertaken for the principal and not the assessee's own trading turnover, the corresponding turnover was not required to be disclosed as the assessee's turnover. The absence of that amount in the audited financial statements could not justify denial of credit of the tax deducted at source. The objection based on sections 37BA and 199 was therefore not sustainable on these facts.

Conclusion: The assessee was entitled to credit of the tax deducted under section 194Q, and the denial of credit was unsustainable.

Final Conclusion: The appeal succeeded on the issue of TDS credit, and the assessee's claim was accepted in full on the reasoning that it acted only as an agent and not as the owner of the disputed turnover.

Ratio Decidendi: Where a commission agent acts only on behalf of its principal and the apparent sale turnover is not its own trading turnover, tax deducted at source on such transactions cannot be denied merely because that turnover is not reflected in the agent's accounts as its own turnover.

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