DCIT, CIRCLE-2(1), SAMBALPUR, SAMBALPUR vs. M/S. HINDUSTAN SALES PVT. LTD., KORAPUT

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER

ITA No.508/CTK/2014 Assessment Year : 2007-08 ACIT, Circle -2(1), Vs. M/s. Hindustan Sales Pvt Sambalpur Ltd., Gandhi Chowk, Koraput By pass Road, PO: Jeypore, Koraput PAN/GIR No. AABCH 3757 R (Appellant) .. ( Respondent)

Assessee by : None Revenue by : Shri D.K.Pradhan, DR

Date of Hearing : 19/04/ 2017 Date of Pronouncement : 25 /04/ 2017

O R D E R Per N.S.Saini, AM This is an appeal filed by the assessee against the order of CIT(A)-

1, Bhubaneswar, dated 29.10.2014, for the assessment year 2007-08.

“Whether in the facts and circumstances of the case, the CIT(A) is correct in deleting the suppressed amount of commission received by the assessee which is evident from TDS certificate and it is not clear on what basis the CIT(A) arrived at a conclusion that it was deducted from purchases as discount.” 3. The notice of hearing dated 23.3.2017 was sent to the assessee

by Speed Post fixing the hearing on 19.4.2017, which is served on the

2 ITA No. 508/CT K/ 2014 Asse ssment Year : 20 07- 08 assessee as evidenced by the acknowledgement of Indian Post on

31.3.2017. When the case was called for hearing, nobody was present

from the side of the respondent-assessee. We, therefore, proceed to

the decide the appeals of the revenue qua the respondent assessee after

hearing ld Departmental Representative and materials available on

record.

that the assessee in his return of income has shown commission receipt

of Rs.8,14,427/-. From the reconciliation statement furnished by the

assessee during the assessment proceedings, the Assessing Officer

observed that the assessee had received commission of Rs.85,11,789/-

out of which Rs.8,14,427/- has been reflected in the in purchase and

expense account as deduction from purchase under schedule-M of the

profit and loss account.

deducted from the bills issued by BSNL against the purchase of recharge

voucher at different rates which was not assessee’s income. The

assessee debited net of purchase in its profit and loss account, exclusive

of commission allowed. BSNL issued TDS certificate in favour of the

assessee crediting the commission amount to the tune of Rs.85,11,789/-

deducting TDS of Rs.4,66,308/- and the assessee claimed the credit of

TDS of Rs.4,66,308/- in its return of income. The Assessing Officer did

3 ITA No. 508/CT K/ 2014 Asse ssment Year : 20 07- 08 not find the explanation of the assessee as convincing and held that the

assessee has taken credit for TDS but failed to offer the receipt of

commission of Rs.85,11,789/- as income. He, therefore, added

Rs.76,97,362 (Rs.85,11,789 – Rs.8,14,427) as suppressed income from

commission.

hearing, the assessee filed the copy of the letter dt.6.12.2012 addressed

to the Assessing Officer along with detailed statement of net purchase

of Rs.11,28,48,976/- from the BSNL which is included in the total

purchase of Rs. 15,91,38,190.06 as reflected in schedule-M of the P&L

account. The net purchase of Rs. 11,28,48,976/- was net purchase after

deducting discount of Rs.75,21,391/- from the gross purchase of

Rs.12,03,70,367/- from the BSNL. A copy of certificate from the BSNL

was also filed wherein total commission has been shown at Rs.

85,11,789/- consisting of RCV & C-Topup commission of -

Rs.75,21,391/-, SIM commission of Rs.8,14,427/- and SIM activation

commission of Rs. 1,75,971/-. Since the purchase from the BSNL net of

commission of Rs.75,21,391/- has been taken in the P&L account,

therefore, the commission of Rs.75,21,391/- has also been considered

while arriving at the net profit.

shows figure of Rs. 15,81,61,229.91 which includes net purchases of

Rs.15,71,24,599.62. The said net purchase of Rs.15,71,24,599.62 has

4 ITA No. 508/CT K/ 2014 Asse ssment Year : 20 07- 08 been arrived at after deducting discount and rate difference of

Rs.11,99,163.44 and commission received of Rs.8,14,427/- from the

total purchases of Rs. 15,91,38,190.06. The figure of Rs.11,99,163.44

includes the BSNL rate difference of Rs.1,75,971/-, which means that

said Rs.1,75,971/- was income reflected in the P&L account by virtue of

showing less purchases to that extent. The addition by the Assessing

Officer of Rs.76,97,362/ consisted of Rs.75,21,391/- and Rs.1,75,971/-

. Accordingly, both the addition amounts to double addition since the

assessee has already offered the same as income by showing less

purchase to that extent. In view of above, ld CIT(A) deleted the addition

of Rs.76,97,362/- and allowed the appeal of the assessee.

Assessing Officer.

materials available on record, we find that ld DR could not point out any

specific error in the order of the CIT(A). He could not bring any positive

record to show that the purchases shown by the assessee in the profit

and loss account is net of commission receipt. Since the purchases are

shown by the assessee net of commission receipt, the commission of

Rs.76,97,362 is already accounted for by the assessee in P&L account

by showing less purchases and thereby showing more profits to that

extent, hence, we find no error in the order of the CIT(A), which is

hereby confirmed and ground of appeal of revenue is dismissed.

5 ITA No. 508/CT K/ 2014 Asse ssment Year : 20 07- 08 10. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on 25 /04/2017 in the presence of parties. Sd/- sd/- (Kuldip Singh) (N.S Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER Cuttack; Dated 25 /04/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : ACIT, Circle -2(1), Sambalpur 2. The Respondent. M/s. Hindustan Sales Pvt Ltd., Gandhi Chowk, Koraput By pass Road, PO: Jeypore, Koraput 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack BY ORDER, 6. Guard file. //True Copy// SR.PRIVATE SECRETARY ITAT, Cuttack