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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SRI MAHAVIR SINGH
This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-10, Mumbai [in short CIT(A)], in appeal No. CIT(A)-10/ITO-5(20(3)/242/2015-16 dated 24.08.2017. The Assessment was framed by the Income Tax Officer, Mumbai Ward 5(2)(3) Mumbai (in short ‘ITO') for the A.Y. 2011-12 vide order dated 30.03.2015 under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in making the addition of ₹ 3,14,595/- being difference in the income on account of entries in form No. 26 AS in respect of Reliance Communication Ltd. and that of the assessee’s books of account. For this assessee has raised the following ground No. 1: - “OBJECTION AGAINST CONFIRMING ADDITION OF Rs. 3,14,595/- ON ACCOUNT OF ALLEGED DIFFERENCE IN INCOME ON ACCOUNT OF ENTRIES IN FORM 26AS (a) On the facts and in the circumstances of the case, the Commissioner of Income- tax (Appeals), hereinafter referred to as the "CIT (A)". has erred in confirming the addition to the extent of Rs. 3,14,595/- on account of alleged difference in income on account of entries in Form 26AS in respect of Reliance Communication Ltd. (b) The CIT (A) has erred in not appreciating the following facts of the case of the appellant:
That the impugned addition is not supported by any evidence except entries in Form 26AS.
That it was incumbent on the assessing officer to issue necessary summons to Reliance Communication Ltd and get the transactions continued especially when the appellant had specifically requested for the same.
That the appellant had not received any ledger confirmation from Reliance Communications in contradiction to the finding given by the CIT(A). c) Your appellant respectfully submits that the entries in the Form 26AS is on account of some mistakes on the part of Reliance Communication Ltd. and the appellant had not earned any corresponding income.
(d) In view of this, the appellant prays that the impugned addition of Rs. 3,14,595/- shall please be deleted.”
Briefly stated facts are that the assessee is a private limited company carrying on business of Distributor of Distributor of Electronics, Telephones. EPABX, KTS Computers, Repairs and Maintenance under the name and style of Lynx Synergy and Solutions Pvt. Ltd. As per AIR information received by AO, the assessee received commission from Reliance Communication Ltd. amounting to ₹ 4,23,275/-. The assessee admitted that it has received commission to the extent of ₹ 1,08,680/- as against the commission of ₹ 4,23,275/-. The assessee was confronted with the ledger confirmation of Reliance Communication Ltd. and CIT(A) accordingly confirmed the addition of ₹ 3,14,595/- being differential amount by observing as under:-
“The appellant has also acknowledged having received ledger confirmations from Reliance Communication Ltd in the communications that it 15/05/2015, 28/05/15 and 01/06/2015 address to Reliance Communication Ltd. Having received the ledger confirmation of account from Reliance Communication Ltd., the appellant cannot now agitate the issue regarding calling for information under section 133 (6) of the Act, as it would not see any purpose since information which would have been obtained by issuing notice u/s. 133 (6) of the Act, is in possession of the appellant. And hence the onus now is with the appellant to prove that the details of transaction received by the appellant from Reliance Communication Ltd are not correct. The appellant has not discharged the onus placed on him. On the contrary, the appellant has not even produced the ledger confirmation received from Reliance Communication Ltd. before me. Keeping in view the above facts, as well as the vacillating stand of the appellant before the AO and before me, the plea of the appellant that the transaction recorded as per CIB information as well as in Form 26AS is not correct, cannot be accepted.
Therefore, the differential amount of the commission needs to be added to the total income of the appellant. However, the appellant has disclosed commission income of Rs. 108680/- in the books of accounts, which has been added twice. The appellant would be eligible for relief to the extent amount disclosed in the books of accounts subject to verification by the AO. Further, the appellant would also be entitled to get its credit available as per Form 26AS, since the AO has brought to tax the impugned amount as income of the appellant.”
Aggrieved against the order of CIT(A), assessee is now in appeal before Tribunal.
I have heard both the sides and going through the facts and circumstances of the case. I find that the assessee now only requested the Reliance Communications Ltd. should be examined to confirm the transaction. As the facts are clear to me, I am of the view that one more opportunity should be given to the assessee to allow him examination of Reliance Communication Ltd because information is received from Reliance Communication Ltd. that it has paid commission to the extent of ₹ 4,23,275/- as against the actual commission claimed to have been received by assessee at ₹ 1,08,680/-. To allow one more opportunity to examine the party, the assessee should be allowed one more opportunity. Accordingly, this issue of assessee’s appeal is restored back to the file of the Assessing Officer.
The second issue in this appeal of assessee is against the order of CIT(A) confirming the disallowance of commission expenses for a non- deduction of TDS by invoking the provisions of section 40a(ia) of the Act. For this assessee has raised the following ground: - “OBJECTION AGAINST CONFIRMING DISALLOWANCE OF Rs. 119915/- OUT OF COMMISSION u/s. 40(a)(ia)
(a) On the facts and in the circumstances of the case, the "CIT (A)', has erred in confirming the disallowance of Rs. 119915/- out of Commission u/s. 40(a)(ia) of the Act for alleged non- deduction of Tax at source.
(b) Your appellant respectfully submits that it has fully complied with the provisions of section 194H and also made the payment of TDS within the prescribed time and as such no disallowance on the above account is called for u/s. 40(a)(ia) of the Act.
(c) Your appellant respectfully submits that it has filed complete details of deduction of TDS and payment thereof before the CIT (A). However, the CIT (A) after appreciating the correctness of the same has proceeded to confirm the disallowance which is not justified.”
I have heard the rival contentions and gone through the facts and circumstances of the case. I find that the assessee has filed details of commission on which TDS was deducted. According to the assessee, the total commission paid was to the tune of ₹ 19,22,988/- and commission on the amount of ₹ 16,918/- no TDS has been deducted. But according to AO, the assessee has not deducted the TDS on the commission payment of ₹ 1,19,915/-. I find from the case records that nothing is clear from orders of the lower authorities and hence, I remit the matter back to the file of the AO for giving finding on which commission the assessee has not deducted TDS. The assessee will co-operate with the AO and will file the details as and when call for. This issue of assesses see’s appeal is also allowed for statistical purposes.
In the result, the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 10-05-2018. AadoSa kI GaaoYaNaa Kulao mao idnaMk 10.-05.2018 kao kI ga[- .