2024 (4) TMI 1174

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....23 arising out of the Intimation u/s 143(1) of the Act by DDIT, CPC, Bengaluru dated 17.02.2023. 2. The sole issue involved in this appeal is denial of TDS credit of Rs. 90,792/- deducted u/s. 194Q of the Act. 3. Brief facts of the case are that assessee is an individual running sole proprietorship concern M/s. Satya Narayan Madan Lal & company. It furnished its income tax return on 28.07.2022 declaring total income of Rs. 6,32,740/- and also claiming prepaid taxes at Rs. 1,55,590/-. However, in the return processed u/s. 143(1)(a) of the Act dated 17.12.2023 the prepaid tax credit was allowed only to the extent of Rs. 64,798/- and the balance tax credit of Rs. 90,792/- was denied. Form No. 26AS duly reflects the TDS of Rs. 1,55,590/- ....

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.... the lower authorities. 6. We have heard the rival contentions and perused the relevant material available before us. The only grievance of the assessee before us is that Ld. CIT(A) erred in confirming the action of the CPC not granting credit of TDS for Rs. 90,792/-. We observe that the assessee is a commission agent and its activity includes buying and selling of goods on behalf of its principal. In the income tax return assessee had furnished business codes namely 09005 relevant to general commission agents and commodity brokers and code 09028 meant for retail sale of products. Before moving further, we need to understand the business model of the assessee, wherein it purchases goods on behalf of its principal by procuring it from the....

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.... discussed above, the assessee raised its invoice to its principal. Now, principal deducts the TDS u/s. 194Q and deposit it with the government and the said TDS is adjusted in the account of the assessee. Now, turnover of such purchase/sale made on behalf of the principal is not required to be reflected in the audited financial statement of the assessee because its turnover is only the commission and not the purchase and sale made on behalf of its principal. Sample invoices have been placed on record for necessary verification of the transaction where on the very same purchase amount TDS u/s. 194Q is deducted and tax deducted u/s. 194H on the commission element. Further, Central Board of Direct Taxes in its circular No. 452 in the year 1986....