GORLA SRINIVASA REDDY,GUNTUR V. .INCOME TXA OFFICER, WARD-1(1), GUNTUR

ITA 503/VIZ/2024

AI Insights

The case revolves around the classification of Gorla Srinivasa Reddy's role in the Guntur Agriculture Market Yard, where he operates as a licensed chilli commission agent. The dispute arose from an intimation under section 143(1) of the Income Tax Act, which disallowed the TDS credit claimed by the appellant. The primary legal issue was whether the appellant should be classified as a 'Trader (Pucca Arahatia)' or a 'commission Agent (Kachha Arhatia)'. The Tribunal referenced several precedents and a CBDT Circular to conclude that the appellant was a commission agent, thereby allowing the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46576 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2023-2024
• Other Referred Cases: Sri Sai Kiran Traders v. ITO, Thota Venkateswarlu v. ITO, Yegneswari General Traders v. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 143(1); 194A

Judgement Text

"आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM न्यायमूर्ति (सेवा र्िवृत्त) सी.वी. भडंग, माििीय अध्यक्ष एिं श्री एस बालाक ृष्णन, लेखा सदस्य क े समक्ष BEFORE JUSTICE (RETD.) C.V. BHADANG, HON’BLE PRESIDENT & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपीलसं./I.T.A.No.503/VIZ/2024 (निर्धारण वर्ा/ Assessment Year: 2023-24) Gorla Srinivasa Reddy D.No. 23-5-11/4 SBI Building, Old Union Bank Road Guntur – 522003, Andhra Pradesh [PAN: ACJPG0404F] v. ITO – Ward – 1(1) Income Tax office C.R. Buildings, Kannavarithota Guntur – 522001 Andhra Pradesh (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri GVN Hari, AR राजस्व का प्रतततितित्व/ Department Represented by : Dr. Aparna Villuri, Sr. AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 20.12.2024 घोर्णध की तधरीख/Date of Pronouncement : 20.12.2024 आदेश /O R D E R PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT 1. By this appeal the Appellant-Assessee is challenging the order dated 17.10.2024 passed by the Addl/JCIT(A) which in turn arose out of the intimation dated 11.12.2023 by CPC, Bangalore under section 143(1) of the Income Tax Act (“Act” for short). The appeal relates to A.Y. 2023-24. 2. The brief facts are that, the Appellant had filed his return of income for the relevant assessment year on 30.09.2023 by declaring total income of I.T.A.No.503/VIZ/2024 Gorla Srinivasa Reddy Page No. 2 Rs.19,47,960/-. The Appellant had received a notice claiming that the receipts found in Form No. 26AS are not fully disclosed in the Income Tax Return. Subsequently the Appellant received the intimation under section 143(1) of the Act on 11.12.2023 disallowing the TDS credit of Rs. 1,40,557/-. The principal issue which arose in the appeal is “whether the appellant was Trader (Pucca Arahatia) or commission Agent (Kachha Arhatia)”. The appellant happens to be a licensed chilli commission agent in the Guntur Agriculture Market Yard. The appellant had received interest from the Traders under section 194A of the Act for delay in payment and commission from sale of chillies and the same was offered to tax. The traders had deducted TDS on sale value. According to the appellant the only commission which the appellant earns is 2% on the total sales. 3. We have heard the parties and perused record. 4. A perusal of Para 4.1 of the impugned order passed by the JCIT(Appeals) shows that the First Appellate Authority has accepted the contention on behalf of the Appellant that he is only acting as a commission agent. However, in the subsequent Para 4.2 the JCIT(Appeal) has recorded a contrary conclusion that appellant is a Trader and not a broker / commission agent as claimed. 5. On behalf of the appellant reliance is placed on the decision of the Coordinate Bench in the case of Sri Sai Kiran Traders v. ITO in ITA No.402/VIZ/2024 decided on 30.10.2024, wherein the Coordinate Bench I.T.A.No.503/VIZ/2024 Gorla Srinivasa Reddy Page No. 3 of this Tribunal relying on its earlier decision in the case of Thota Venkateswarlu v. ITO in ITA No. 290/VIZ/2024 decided on 27.08.2024 and Yegneswari General Traders v. ITO in ITA No. 39/Viz/2024 decided on 18.03.2024 have held that the assessee were acting as Kachha Arhatia and were earning only gross commission. The Decision relied upon had in turn placed reliance on a CBDT Circular No. 452 dated 17.03.1986. 6. Ld. Sr. AR on behalf of the revenue in all fairness submitted that if the facts as obtaining in the present appeal would be covered by the decision in the case of Sri Sai Kiran Traders v. ITO supra. In that view of the matter and particularly in view of the fact that in Para 4.1 even the First Appellate Authority has accepted that the Appellant was only a commission agent. We find that the impugned decision cannot be sustained. In the result, the appeal is allowed and direct the AO/CPC to grant TDS to the appellant as claimed in the return of income filed by the assessee. 7. In the result, appeal is allowed in the aforesaid terms. Order pronounced in the open court on 20th December, 2024. Sd/- (एस बालाक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (न्यायमूर्ति (सेवा र्िवृत्त) सी.वी. भडंग) (JUSTICE (RETD.) C.V. BHADANG) अध्यक्ष /PRESIDENT Dated:20.12.2024 Giridhar, Sr.PS I.T.A.No.503/VIZ/2024 Gorla Srinivasa Reddy Page No. 4 आदेश की प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Gorla Srinivasa Reddy D.No. 23-5-11/4 SBI Building, Old Union Bank Road Guntur – 522003, Andhra Pradesh 2. रधजस्व/ The Revenue : ITO – Ward – 1(1) Income Tax office C.R. Buildings, Kannavarithota Guntur – 522001 Andhra Pradesh 3. The Principal Commissioner of Income Tax 4. नवभधगीय प्रनतनिनर्, आयकर अपीलीय अनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. गधर्ा फ़धईल / Guard file //True Copy// आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "