SMT. NIRMALI BHADRA ,SILIGURI vs. ITO, WARD - 2(4) , SILIGURI

At the outset itself, the ld. AR of the assessee brought to our notice that this is second round of appeal before this tribunal. First ground of appeal is against the action of the ld. CIT(A) in not giving proper opportunity of hearing to the assessee, since this ground is not pressed, the same is dismissed as not pressed.

Coming to the next ground of appeal, which is against the action of the ld. CIT(A) in confirming the addition of Rs. 11,16,426/- on account of balance commission.

Brief facts of the case as noted by the AO are that the assessee had shown commission receipt of Rs. 10,66,159/- , though as per TDS certificates total commission receipt was amounting to Rs. 21,82,585/-. The AO confronted the assessee with the said anomaly. However, according to the AO explanation submitted by the A/R of assessee was not found tenable and therefore, he added the amount of difference of commission receipt of Rs. 11,16,426/- with the income of the assessee. Nirmali Bhadra Thereafter, the assessee went in 1st appeal before the ld. CIT(A), who was pleased to confirm the same. Thereafter, the assessee filed her appeal before this tribunal and this tribunal was pleased to set aside the same vide order dt. 04-10-2016 directing the AO to give proper and sufficient opportunity of being heard and to pass a fresh order of the same. Thereafter, the AO in the second round of appeal on this issue after notice issued u/s.131 of the Income-tax Act, 1961 ( in short, hereinafter referred to the ‘Act’) to the Managing Director, Unipay2U Marketing P.Ltd, Chennai, from which the company she (assessee) claimed to have received a commission. However, according to the AO that notice was returned back with the remark ‘no such Unipay Marketing P.Ltd, not known’). Thereafter, the AO issued notice to the DDIT, Admin to Pr. DIT, Chennai with the request for service of notice u/s. 131 of the Act to the said company. Pursuant to which, Income tax Inspector reported that there is no such company. Thereafter, the AO after fixing the matter on several dates concluded that no such company exists. The AO further notes that the assessee on one hand claims full TDS credit of Rs. 2,18,325/- and on the other hand she ( assessee) is objecting to the income corresponding to the same of Rs. 21,82,525/-. The AO notes that the ld. CIT(A) Siliguri during the first round of appeal has allowed the TDS amounting to Rs. 2,18,325/- on the basis of Form 16A issued by the said company. According to the AO, the assessee in order to get credit of TDS relied upon TDS Certificate issued by the said company. However, she denies having received income corresponding to TDS credit, which action of the assessee cannot be accepted and he made addition of Rs. 11,16,426/-. On appeal, the ld. CIT(A) has sustained the same. Aggrieved, the assessee is before us.

Having heard both the parties, we note that this is assessee’s second round of appeal before this Tribunal. During the second round the AO had issued summons to the said company (M/s. Unipay 2U Marketing P.Ltd), which was not responded to. Thereafter, the AO notes that the assessee claims credit for TDS of Rs. 2,18,325/-, which is shown in Form 16A. However, the assessee (she) objects to the corresponding income and does not accept that she has received income of Rs. 2,18,325/-, Therefore, the AO added the difference amount of Rs. 11,16,426/-. Before me the ld. Advocate, Shri Sanjib Chakraborty filed a copy of reconciliation statement from which I understand that the assessee is an agent of M/s. Unipay 2U Marketing Nirmali Bhadra P.Ltd. (networking company), which has been found to be involved in fraudulent activity with its customers. The said company had issued Forms 16A (TDS Certificate) to the assessee, a perusal of which reveals that it had credited (as per Form 16A) an amount of Rs. 21,82,585/-. Therefore, the AO was of the opinion that the assessee had received a commission of Rs. 21,82,585/-. However, according to her ( assessee ) though the TDS Certificate shows that the company had credited a sum of Rs. 21,82,585/- to her, but actually she received only of Rs. 2,39,133/- and also shown as receivable of Rs. 8,27,026/-, which comes to total of Rs. 10,66,159/-. However, the AO taking note of the figures shown in From 16A found that there is a difference amount of Rs. 11,16,426/- ( Rs. 21,82,585 – Rs. 10,66,159/-). Thus, he made the addition of Rs. 11,16,426/-, which according to the ld. AR is erroneous. He drew my attention to page-37 of the P/B, which is the copy of Form 26AS, which has been downloaded from the website of the Income tax Department. Form 26AS which is the Annual Tax Statement u/s. 203AA of the Act. On perusal of the same, it shows that the assessee for this AY (2010-11) (FY 2009-10) has received income of Rs. 3,95,030/- and TDS of Rs. 39,569/- has been deducted and deposited the same in the Government account. Thus, I note that there are two documents before me (i) Form 16A-TDS Certificate and (ii) Form 26AS, [which is downloaded from the Income-tax Department website], which shows that for the same assessment year ( AY ) two different figures from two sources. The AO has taken the figures from the TDS Certificate issued by the said company (M/s. Uni pay) as gospel truth to make the impugned addition. The AO being a quasi judicial authority should be fair while framing the assessment of the assessee under the Act (income-tax). The AO had in his hand also Form 26AS, which reveals that an amount of Rs. 3,95,030/- was credited in the assessee’s account for this AY (2010-11) (FY 2009-10). TDS amount of Rs. 39,569/- has been deducted and deposited in the Government Account. I find that Form 26AS is maintained by the Income-tax Department. In such a scenario, in the interest of justice and since it is second round of assessee’s appeal, and keeping in mind that there should be finality of the issue i am deciding as infra. First of all, Form 16A is generated by M/s. Unipay Marketing Pvt. Ltd, which is payer and the assessee who is the payee has no control over it. Even if the amount is paid it should have been accounted for in assessee’s bank account, which is not the case of the AO. Simply Nirmali Bhadra because there is difference in the claim of assessee in respect of TDS credit and the corresponding income, the AO has made the addition which cannot be accepted when the Form 26AS gives a different picture, which also assessee has no control; and 26AS Forms are generated by the Income-tax department and the figures come close to the assessee’s contention. Therefore, I am of the opinion the assessee’s income should be taken as Rs. 3,95,030/-, which is shown in Form 26AS (downloaded from the Income- tax Department website) and she should be given TDS credit of only Rs. 39,569/- as reflected in the Form 26AS. I direct the AO to adopt these figures and compute the taxable income of assessee accordingly as per law.

Ground no. 3 is against the action of the ld. CIT(A) in confirming the addition of Rs. 5,92,100/- on account of unexplained cash credit.

The AO noted that the assessee had unexplained cash deposits in her two Axis Bank Accounts (A/c No. 035010100382755 & 5490100024152) to the tune of Rs. 5,92,100/-, which were deposited in cash. When confronted by this fact, the assessee submitted that these are not her deposits but of four (4) persons named in the assessment order. She also submitted a notarized affidavit of the two alleged depositors. However, AO notes that notice issued u/s. 133(6) of the Act were returned back. Therefore, the AO made the addition. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who confirmed the action of the AO. Aggrieved, the assessee is before me.

Having heard both the parties and after perusal of the records, I note that the AO detected that the assessee had two banks accounts (supra) from which there was cash deposit of Rs. 5,92,100/-, which could not be explained by the assessee to his satisfaction in respect of identity, creditworthiness and genuineness of the transaction. Therefore, he made the addition. The ld. AR before me also repeated the explanation as given before the authorities below that money was deposited by four persons on four (4) different occasions into two different bank accounts of the assessee and that it was not her money, but, only she has collected their money from those four (4) different parties named in the assessment order for on-ward transferring to M/s UniPay. Therefore, according to her, the cash deposits of Rs. 5,92,100/- cannot be treated as her income and taxed thereon. However, it is noted that though she filed notarized Affidavits of the two parties who claimed that they had deposited amount in Nirmali Bhadra assessee’s bank account, but the ld. AR failed to show before me by means of any evidence to suggest that the money deposited in assessee’s bank account was used only as pass through entry through her bank account and thereafter this money has flown out of the assessee’s bank account to M/s. Unipay 2u Marketing P.Ltd. The ld. AR failed to do so by adducing any evidence. Therefore, addition of Rs. 5,92,100/- cannot be faulted as such. However, taking into consideration the fact that this is second round of appeal and since I have already held that the assessee has received an amount of Rs. 3,95,030/- as her income while deciding the ground no. 2, therefore, this amount should be telescoped with the amount deposited in the bank account of assessee. Thus, assessee gets a relief of [Rs. 5,92,100 – Rs. 3,95,030]= Rs. 1,97,070/-, to be added in place of Rs. 5,92,100/- made by the AO and confirmed by the ld.CIT(A). The AO is directed to make an addition of Rs. 1,97,070/- as assessee’s undisclosed income and tax to be computed accordingly as per law. This ground of assessee is partly allowed.

Before parting, it is noted that the order is being pronounced after the ninety (90) days of hearing. However, taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the decision of the Co- ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. JSW Limited in & 6103/Mum/2018, Assessment Year 2013-14, order dt. 14th May, 2020. In the light of the above discussion, the appeal of assessee is partly allowed in above terms/discussion.

In the result, the appeal of assessee is partly allowed.