GULSHAN KUMAR MEHDIRATTA,SAHARANPUR vs. ITO, WARD- 3(2), SAHARANPUR

Aggrieved with such order of the CIT(A), the assessee is in appeal raising the following grounds:-

The Ld. CIT (A) has erred in law and on facts by enhancing the assessment after restricting the deduction for payment of 31,61,205/- to retailers/ dealers to only Rs 7,97,230/- 3. The Ld. CIT (A) has erred in enhancing the assessment on conjectures and surmises and without considering the submissions of the appellant.

The ld. counsel for the assessee filed two paper books containing total 521 pages and submitted that the authorities below have not properly appreciated the facts of the case. He submitted that the assessee, no doubt, has received the incentives/commission from the telecom operators. However, these were passed on to the retailers as per the policy of the principals as well as that of the assessee. He submitted that the income enhanced by the CIT(A) is not proper and is liable to be deleted. In his alternate contention, he submitted that he has no objection if the matter is restored to the file of the Assessing Officer with a direction to give another opportunity to the assessee to substantiate his case that whatever incentive/commission has been received has been duly transferred to the retailers/customers and the surplus, if any, has been offered to tax.

The ld. DR, on the other hand, heavily relied on the order of the CIT(A). He submitted that the assessee has not disclosed the amount of incentive/commission received in the P&L Account and has also not shown the payment to any such incentive/commission to the retailers/customers. Therefore, the order of the CIT(A) being in accordance with the law should be upheld and the grounds raised by the assessee should be dismissed.

I have considered the rival arguments made by both the sides and perused the orders of the authorities below. It is an admitted fact that the assessee in the Profit & Loss Account has not disclosed the amount of Rs.31,61,205/- received by him on account of commission/incentive from the telecom operators and has also not shown any payment made on this account to the retailers/sub-dealers in the Profit & Loss Account. The ld.CIT(A), therefore, issued enhancement notice and made addition of Rs.23,63,975/- after allowing Rs.7,97,230/- as business expenses on account of amount paid to sub-dealers/retailers for incentive. It is the submission of the ld. counsel for the assessee that whatever commission/incentive has been received have been passed on to the customers and, therefore, there was no necessity of enhancing the income of the assessee. It is also his submission that the voluminous documents filed in the paper book were not considered by the CIT(A) while enhancing the income of the assessee. Considering the totality of the facts and circumstances of the case and in the interest of justice, I deem it appropriate to restore this issue back to the file of the Assessing Officer with a direction to verify the various details furnished by the assessee and decide the issue afresh and in accordance with the law, after giving due opportunity of being heard to the assessee. I hold and direct accordingly. The grounds raised by the assessee is accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.