TDS credit in assessee's PAN upheld despite income being claimed in another person's hands.

TDS credit under section 194Q was held admissible where tax had been deducted and deposited in the assessee's PAN, as reflected in Form 26AS, even though the underlying income was claimed to belong to the seller and the assessee acted as a commission agent. The Tribunal held that once tax is deducted from income attributable to the assessee and remitted to the Government, credit cannot be denied merely because the deduction should have been made in another person's hands. The contrary view was rejected, and denial of credit was held unsustainable in law.

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Issues: Whether the assessee was entitled to credit of tax deducted at source under section 194Q of the Income-tax Act, 1961, read with section 199 and rule 37BA of the Income Tax Rules, 1962, where the deduction had been made in the assessee's PAN although the underlying income was claimed to belong to the seller and the assessee acted only as a commission agent.

Analysis: The Tribunal noted that the deduction had admittedly been made and deposited in the Government treasury in the assessee's PAN as reflected in Form 26AS. It held that once tax has been deducted from income attributable to the assessee and paid to the Central Government, the assessee cannot be denied credit merely because the deduction ought to have been made in some other person's hands. The Tribunal disagreed with the view that credit could be refused on the ground that the corresponding income was assessable in another person's hands, and held that the deduction in the assessee's PAN constituted tax paid on his behalf for credit purposes.

Conclusion: The assessee was entitled to TDS credit under section 194Q, and the denial of such credit by the lower authorities was held to be unsustainable in law.

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