ITO, ROHTAK vs. SMT. KAVITA, ROHTAK

ORDER

PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER

Assessee vide his reply dated 22.12.2011 submitted as under:- (l)The amount received by the assessee as per TDS certificate is not a commission, rather it is the amount received from company i.e. Vodafone Essar Digilink Ltd. to reimburse it to Assistant Distributors i.e. A.D. The company has to pay to the ADs amount in shape of rent, salary, DD, cheques, promotional schemes etc. and that they pass on through Master Income such as discount, commission etc. The chart showing the amount received & reimbursement made to the Assistant Distributor is attached. (2) The amount of Rs 13,71,267/- cannot be added to the income u/s 40 (a) (ia) of the Income Tax Act 1961 as there is no liability to deduct tax as the amount is received as reimbursement to be made to Assistant Distributors. (3) In support of my contention, copies of ledger accounts of ADs are attached. 2.3 The AO held that the contention of the appellant is not acceptable as she failed to disclose true facts in the return of income. Further, the contention that these payments are not subject to TDS is not acceptable. On similar payments received by the appellant, M/s Vodafone has deducted TDS and on the same set of circumstances and on the same type of payments, the claim of the appellant that she has not deducted TDS is not sustainable. Further, the 'appellant has failed to furnish complete address of the persons to whom these payments have been made and has also not filed any confirmations. In view of the above, the AO made entire addition of Rs 72,52,052/-, being the receipts from M/s Vodafone as reflected in Form 26AS, which have not been disclosed in the return of income.”

ITA 5106/Del/2012 A.Y. 2009-10 Mrs. Kavita vs. ITO, Ward 2, Rohtak 3. Aggrieved the assessee carried the matter in appeal. 3.1. The Ld.CIT(A) granted relief by observing : (a) the receipt of Rs.10,65,345/- from Vodafone was on account of reimbursement of salary on which the assessee has not earned any profit. (b) receipt of discount of Rs.13,09,267/- from M/s Vodafone was on account of reimbursement of amounts paid to ADs on which also assessee has not earned any profit. (c ) these issues were clarified by way of recasting of Profit and Loss a/c filed before the A.O. (d) As regards the incentive to retailers of Rs.48,77,440/-, the same has been paid directly by M/s Vodafone and was not routed through the assessee. Just because Vodafone credited the TDS to the account of the assessee, the amount in question does not become the income of the assessee. (e )As an amount of Rs.48,77,440/- does not form part of the receipts of the assessee, corresponding credit of TDS ofRs.1,10,767/- cannot be given to the assessee.