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

per the provisions of section 251(1) of the Act. Rejecting the various explanations

given by the assessee and after considering the amount of Rs.7,97,230/- paid by the

assessee to sub-dealers/retailers as incentives, made an addition of Rs.23,63,975/- in

the hands of the assessee. Thus, he enhanced the income of the assessee by

Rs.23,63,975/- u/s 251(1) of the Act.

following grounds:-

“l. The Ld. CIT (A) has grossly erred in law and on facts by enhancing the assessment after assuming an amount of Rs 31,61,205/- as the business income of the appellant. 2. 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. 4. The appellant craves for leave to add, amend, modify or withdraw any of the grounds of appeal.”

ITA No.7824/Del/2017

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.

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.

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

ITA No.7824/Del/2017

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.

The decision was pronounced in the open court on 26.02.2019.

Sd/- (R.K. PANDA) ACCOUNTANT MEMFBER Dated: 26th February, 2019 dk

ITA No.7824/Del/2017