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Income Tax Appellate Tribunal, KOLKATA ‘B(SMC
Before: Shri P.M. Jagtap, Vice-(KZ)
This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-12, Kolkata dated 22.12.2017, whereby he confirmed the addition of Rs.4,10,570/- made by the Assessing Officer on account of disallowance of commission.
The assessee in the present case is an individual, who is engaged in the business of trading of goods of Parley Products Pvt. Limited and also acts as a commission agent for different Telecom products. The return of income for the year under consideration was filed by him on 22.03.2015 declaring a total income of Rs.5,21,560/-. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee during the year under consideration had received commission of Rs.41,05,700/- from Reliance Telecom Limited and the same was entirely
Assessment year:2014-2015 Page 2 of 3 passed over by him to the sub-agents. He, therefore, required the assessee to offer his explanation in this matter. The assessee, however, could not offer any explanation to the satisfaction of the Assessing Officer on this issue and consequently the commission claimed to be paid by the assessee was disallowed by the Assessing Officer to the extent of Rs.4,10,570/- being 10% of the total commission paid amounting to Rs.41,05,700/- in the assessment completed under section 143(3) vide an order dated 20.12.2016.
Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging the disallowance of Rs.4,10,570/- made by the Assessing Officer on account of commission and since there was no proper compliance on the part of the assessee to the notices issued by him fixing the said appeal for hearing from time to time, the ld. CIT(Appeals) dismissed the appeal of the assessee vide his appellate order dated 22.12.2017 passed ex-parte. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
I have heard the arguments of both the sides and also perused the relevant material available on record. Besides explaining the non- compliance on the part of the assessee during the course of appellate proceedings before the ld. CIT(Appeals), the ld. Counsel for the assessee has contended that the entire commission income earned by the assessee was required to be passed over to the sub-agents as per the modus operandi followed in the business and the same was duly explained by M/s. Reliance Telecom Limited vide its letter dated 10.10.2016 directly written to the Assessing Officer in response to the notice issued under section 133(6) of the Act. He has also filed a copy of the said letter placed at pages no. 2 & 3 of his paper book along with the relevant Annexure. As pointed out by the ld. D.R. in this regard, the said letter, however, was received by the Assessing Officer on 26.12.2016, i.e. only after passing the assessment order under section 133(6) on 20.12.2016. It is thus clear
Assessment year:2014-2015 Page 3 of 3 that the Assessing Officer could not verify the claim of the assessee as regards the payment of entire commission to the sub-agents on the basis of the letter dated 10.10.2016 sent directly by M/s. Reliance Telecom Limited in response to notice issued by the Assessing Officer under section 133(6). Keeping in view this position manifest from the material placed on record, I consider it fair and proper and in the interest of justice to set aside the impugned order of the ld. CIT(Appeals) on the issue under consideration and remit the matter back to the Assessing Officer for deciding the same afresh after verifying the claim of the assessee of having paid the entire commission income to the sub-agents from the letter dated 10.10.2016 received from M/s. Reliance Telecom Limited as well as other details annexed to the said letter.
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on October 22, 2018. Sd/- (P.M. Jagtap) Vice-President (KZ) Kolkata, the 22nd day of October, 2018 Copies to : (1) Sri Dinabandhu Biswas, Vill. Malipota, P.O. Fulia Boyra, Santipur, Nadia-741 402 (2) Income Tax Officer, Ward-41(2), Nadia, Anant Hari Mitra Road, Nediar Para, Krishnanagar, Nadia-741101