TDS credit for Kachha Arhtia commission transactions upheld where sales belonged to principals, not the agent's turnover.

For a Kachha Arhtia, sales made on behalf of principals are not treated as the assessee's own turnover, and only commission receipts are relevant for tax purposes under section 44AB. Relying on Circular No. 452 and a coordinate bench view, the ITAT Jaipur held that TDS credit reflected in Form 26AS could not be denied where tax had been deducted under sections 194H and 194Q on commission-agent transactions, because the invoices recorded sales for farmers and not the assessee's turnover; full TDS credit was therefore allowable.

---

---

Issues: Whether credit of tax deducted at source under sections 194H and 194Q was rightly denied while processing the return of an assessee carrying on business as a Kachha Arhtia.

Analysis: The return disclosed commission receipts as gross receipts and the assessee claimed TDS reflected in Form 26AS. Circular No. 452 dated 17/03/1986 was relied upon for the proposition that, in the case of a Kachha Arhtia, sales effected on behalf of principals are not to be treated as the assessee's turnover and only commission is relevant for tax purposes under section 44AB. The record also showed that similar circumstances had been recognised in the cited coordinate bench decision, which held that a commission agent functioning as a Kachha Arhtia is entitled to credit of TDS deducted both under section 194H and under section 194Q, and that the sales reflected in invoices on behalf of farmers do not constitute the assessee's own turnover.

Conclusion: Credit of TDS deducted under sections 194H and 194Q could not be denied, and the assessee was entitled to full TDS credit.

---