DIPTI MITTAL SHAH,PUNE vs. INCOME-TAX OFFICER, WARD - 8(5), PUNE

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.

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.

together.

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.

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.

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.

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.