TDS credit follows the income owner, so credit was denied where the corresponding income belonged to farmers.

TDS credit is available only where the tax deduction and the corresponding income are attributable to the same person. The assessee's claim failed because the purchases and related income belonged to agriculturists or farmers, while the TDS was merely reflected in the assessee's PAN. Under section 199 and Rule 37BA(2), credit required a proper declaration or correction so the tax credit followed the income owner; no such correction was made and the related income was not offered in the assessee's return. The processing-stage adjustment was therefore valid, and the claimed credit was disallowed.

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Issues: Whether the assessee was entitled to TDS credit under section 194Q despite the income corresponding to the deducted tax belonging to the agriculturists or farmers and not to the assessee.

Analysis: The assessee admitted that the purchases and corresponding TDS did not arise from its own sales but from transactions of agriculturists or farmers, while the TDS had been reflected in the assessee's PAN. In such a situation, credit could be granted only where income and TDS are attributable to the same person. The finding rested on section 199 and Rule 37BA(2), under which the assessee was required to obtain proper declaration or correction so that the tax credit followed the person to whom the income belonged. Since no such correction was made and the corresponding income was not offered in the assessee's return, the adjustment made at the processing stage was held to be valid.

Conclusion: The assessee was not entitled to the claimed TDS credit, and the disallowance was upheld.

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