GOURANGA SUNDAR MONDAL,BURDWAN vs. ITO, WD-2(1), BURDWAN, BURDWAN

The main issue of the assessee is against the action of the Ld. CIT(A) in confirming the addition of Rs.62,27,292/- as well as enhancing the addition of Rs.2,85,366/- based on the mismatch of TDS credit claimed by the assessee and 26AS (TDS data base of the Department).

Brief facts of the case are that the assessee had filed return declaring total income of Rs.2,32,356/-. During the assessment proceedings, the AO on perusal of the TDS certificate took note that the assessee has claimed TDS credit of Rs.6,69.942/-. However, the AO noted that the income corresponding to the aforesaid TDS amount was not reflected in the total income of the assessee. Therefore, AO added Rs.62,27,292/- which, according to him, has been received by the assessee from his principal M/s. Dishanet Wireless Ltd.

We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee is a proprietor of Disha Communications and was a distributor under M/s. DWL (Aircel) Mobile networking for the areas Burdwan town, Bud Bud, Kalna, Katwa and Memari. The Aircel allowed incentive to retail shop for activation charges through distributors, the assessee Disha Communications. From a perusal of the P&L Account filed before us, we find that the total turnover of the assessee was to the tune of Rs.2,24,22,061/- and the commission received from Aircel is shown as Rs.3,17,699/-. According to the assessee, the Aircel has paid retail incentive commission of Rs.65,12,658/- directly to the retailers in the form of recharging commission, activation charges on behalf of the assessee. However, the TDS credit was reflected on assessee’s account and, therefore, the confusion has happened, though the fact is that the assessee has been paid as commission only Rs.3,17,699/-. According to the assessee, the AO issued letter dated 23.12.2010 to the Principal Officer of Aircel and since the AO did not receive any reply from the Aircel made the addition of Rs.62,27,292/- and concluded the assessment vide order dated 31.12.2010. On appeal, the Ld. CIT(A) taking note of the letter date 28.12.2010 of Aircel was pleased to make an enhancement of Rs.2,85,366/- as well as confirmed the action of the AO in making addition of Rs.62,27,292/-. The Ld. AR drew our attention to the letter of the Aircel dated 08.02.2012 wherein the Aircel has clarified the fact that it had paid commission of only Rs.3,17,699/- to the assessee and Rs.65,12,658/- was remitted to the retailers in the form of recharge commission, activation charges by Aircel on behalf of the assessee. That letter dated 08.02.2012 of the Aircel to the assessee explaining the facts is reproduced below:

In the result, the appeal of assessee is allowed