Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI ANIL CHATURVEDI, AM
आदेश / ORDER PER ANIL CHATURVEDI, AM :
This appeal filed by the assessee is emanating out of the 1. order of Commissioner of Income Tax (A) – 6, Pune dt.10.07.2017 for the assessment year 2013-14.
The relevant facts as culled out from the material on record are as under :-
2.1 Assessee is an individual stated to be Retailer in different types of mobile handsets and wholesales and retailer in sale of prepaid recharge vouchers and prepaid sim cards. Assessee filed her return of income for A.Y. 2013-14 on 23.09.2013 declaring
ITA No.2303/PUN/2017
total income of Rs.6,58,110/-. The case was taken up for scrutiny
and thereafter assessment was framed u/s 143(3) of the Act vide
order dt.23.12.2015 and the total income was determined at
Rs.15,19,530/-. Aggrieved by the order of AO, assessee carried the
matter before Ld.CIT(A), who vide order dt.10.07.2017 (in appeal
No.PN/CIT(A)-6/ITO W.8(5)/379/2015-16) dismissed the appeal of
assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in
appeal and has raised the following grounds :
“1. On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the addition made by the AO invoking the provisions of Sec.40(a)(ia) of Rs.8,61,418/-. Considering the facts and the circumstances and nature of the business the amount paid is nothing but reimbursement of expenses which is beyond the scope of Sec.40(a)(ia) of the Act. The addition be quashed.
On the facts and circumstances of the case and in law the appeal order of the CIT(A) and assessment order of the AO be set aside as the same are contrary to the provisions of the law and precedents.”
Both the grounds being inter-connected are considered
together.
During the course of assessment proceedings, AO on
perusing the Profit and Loss account noticed that assessee had
claimed expenses on account of “Commission Purchases”
aggregating to Rs.8,61,418/-. Assessee was asked as to whether
TDS on the amount of “Commission Purchases” was made as per
Sec.194H of the Act. Assessee inter-alia submitted that the
commission has been directly paid by the Idea Cellular to the
dealers and has routed through the assessee’s ledger account since
dealers fall under the time of business of assessee. The assessee
ITA No.2303/PUN/2017
further submitted that she is not aware as to whom the
commission is paid and how much amount is paid to which dealer.
The submissions of the assessee were not found acceptable to AO.
He thereafter disallowed Rs.8,61,418/- u/s 40(a)(ia) of the Act.
Aggrieved by the order of AO, assessee carried the matter before
Ld.CIT(A), who upheld the order of AO. Aggrieved by the order of
Ld.CIT(A), assessee is now in appeal.
Before me, Ld.A.R. reiterated the submissions made before
lower authorities and further submitted that assessee was engaged
in the business of trading of sim cards, recharge vouchers and
prepaid vouchers of Idea company and other companies. He
submitted that the commission expenses have not been incurred
by the assessee and have been directly paid by the company to the
dealers and had routed it through the assessee’s account. He
submitted that only the TDS reflected in form 26AS is the income
of assessee. He further submitted that the assessee has been
following the same method of accounting in earlier and subsequent
years and the same has been accepted by the Revenue. In such
circumstances, he submitted that no disallowance is called for.
Ld.D.R. on the other hand supported the order of lower authorities.
I have heard the rival submissions and perused the material
on record. The issue in the present ground is with respect to
disallowance u/s 40(a)(ia) of the Act on the alleged commission
paid without deducting the TDS on such commission payments.
Before me, Ld.A.R. has submitted that no commission has been
ITA No.2303/PUN/2017
paid by the assessee and the commission has been paid by the
Idea Company directly to the dealers but had only routed the
commission through the account of the assessee. It is also Ld AR’s
submission that the aforesaid method of accounting has been
consistently followed by the assessee and no disallowance of
commission has been made by the Revenue in earlier or
subsequent years. Before me, the aforesaid contentions of the Ld
AR have not been controverted by Revenue. In view of the aforesaid
facts and following the principle of consistency and more so when
no distinguishing feature in the facts of the year under
consideration and of other years been pointed out by Revenue, I
am of the view that no disallowance of expenses u/s 40(a)(ia) is
called for in the present case. I thus direct the deletion of
disallowance made by AO and confirmed by CIT(A). Thus, the
ground of assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced on the 18th day of March, 2019.
Sd/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER
पुणे Pune; �दनांक Dated : 18th March, 2019. Yamini
ITA No.2303/PUN/2017
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-6, Pune. 4. Pr. CIT-5, Pune. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक सद�य” / DR, ITAT, “SMC” Pune; 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.