Smt. Amita Malhotra, Shimla V. ACIT, Shimla

ITA 548/CHANDI/2012

• Counselvise Citation: 54821514 RSA 2012
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER MEENA
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 548/CHD/2012 ASSESSMENT YEAR: 2006-07 SMT. AMIT MALHOTRA, VS THE ACIT, CIRCLE, C/O NEW BRIDGE VIEW HOTEL, SHIMLA SHIMLA PAN NO. AEEPM0162R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHAN RESPONDENT BY : SHRI SURINDER MEENA DATE OF HEARING : 26.06.2012 DATE OF PRONOUNCEMENT : 28.06.2012 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), SHIMLA DATED 04.04.2012 RELATING TO ASSES SMENT YEAR 2006-07. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING AN ADDITION OF RS. 1,62,429/- ON ACCOUNT OF ALLEGED DIFFERENCE OF COMMISSION DECLARED BY THE ASSESSEE AS PER TDS AND THAT TOO UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 . 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E RETURN OF INCOME IN THIS CASE WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT , 1961 (IN SHORT 'THE ACT') ON A TOTAL INCOME OF RS. 3,20,697/-. SUBSEQU ENTLY, IT CAME TO THE NOTICE OF ASSESSING OFFICER THAT ASSESSEE HAD FURNISHED TE N TDS CERTIFICATES OUT OF WHICH, NINE TDS CERTIFICATES PERTAINED TO COMMISSIO N INCOME AND ONE OF THEM PERTAINED TO INTEREST INCOME. ACCORDING TO TH ESE TDS CERTIFICATES, THE ASSESSEE HAD RECEIVED COMMISSION PAYMENT AGGREGATIN G TO RS. 16,84,958/- FROM WHICH INCOME TAX AT SOURCE AGGREGATING TO RS. 94,526/- WAS DEDUCTED. HOWEVER, IN THE PROFIT AND LOSS ACCOUNT, THE ASSESS EE HAD DECLARED COMMISSION INCOME OF RS. 15,22,529/- ONLY. ACCORDI NG TO ASSESSING OFFICER, THE ASSESSEE HAD CLAIMED THE CREDIT OF WHOLE AMOUNT OF TDS OF RS. 95,280/- DEDUCTED ON COMMISSION. THUS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD RETURNED INCOME SHORT BY RS. 1,62,429/ - (RS. 16,84,958/- - RS. 15,22,529/- ) WHICH WAS REQUIRED TO BE ADDED BACK A ND CHARGED TO TAX ACCORDINGLY. THE ASSESSING OFFICER, THEREFORE, ISS UED NOTICE U/S 154 OF THE ACT TO THE ASSESSEE STATING THEREIN THE ABOVE MISTA KE AND PROPOSED TO RECTIFY THE SAME BEING MISTAKE APPARENT FROM RECORD. IN RE SPONSE TO ABOVE NOTICE, THE ASSESSEE SUBMITTED THAT COMMISSION WAS IN FACT CREDITED AT RS. 21,36,440/- DURING THE YEAR AND AFTER DEBITING OUTG OINGS, THE NET COMMISSION CAME TO RS. 15,22,529/-. A COPY OF THE COMMISSION ACCOUNT WAS ALSO FURNISHED WITH THE REPLY. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE STATING THAT THE TOTAL COMMISSION DECLARED IS RS. 15,22,529/- WHEREAS AS PER TDS CERTIFICATE, THE TOT AL COMMISSION CAME TO RS. 16,84.958/-. HE FURTHER OBSERVED THAT IN THE REPLY THE ASSESSEE HAS SOUGHT TO JUSTIFY THE DIFFERENCE BY STATING THAT HIGHER AMOUN T OF COMMISSION HAS BEEN DECLARED. ACCORDING TO ASSESSING OFFICER THE FIGUR ES ARE NOT RECONCILABLE. 3 HE, THEREFORE, ADDED DIFFERENCE OF RS. 1,62,429/- T O THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) UPHELD THE ORDER OF THE AS SESSING OFFICER PASSED U/S 154 / 155 OF THE ACT. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI VISHAL MOHAN, LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE DURING THE YEAR UNDER C ONSIDERATION HAD FILED RETURN OF INCOME DECLARING A NET TAXABLE INCOME AT RS. 3,20,697/-. IN THE COMPUTATION OF INCOME, THE ASSESSEE HAS DECLARED CO MMISSION INCOME AT RS. 15,22,529/-. ACCORDING TO LD. COUNSEL FOR THE ASSE SSEE, THE GROSS RECEIPT OF COMMISSION WAS BOOKED IN THE ACCOUNTS AMOUNTING TO RS. 21,36,446/- AND AS SUCH NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN. HE SAID THAT ADDITION HAS BEEN MADE JUST FOR THE SAKE OF MAKING ADDITION TOTA LLY IGNORING THE COMMISSION ACCOUNT WHICH WAS PLACED ON RECORD AND T HE ENTRIES OF THE SAME ARE DULY RECONCILED WITH THE TDS CERTIFICATES. IN THE INSTANT CASE, THE ASSESSEE HAS SUBMITTED A COPY OF TDS CERTIFICATES ( PAGES 5 TO 13 OF THE ASSESSEES COMPILATION) AND ALSO COPY OF COMMISSION ACCOUNT (PAGES 14 TO 16 OF THE PAPER BOOK). ON PERUSAL OF THE ABOVE DOCUME NTS, IT IS CLEAR THAT THE ASSESSEE HAD RECEIVED COMMISSION AMOUNTING TO RS. 2 1,36,446/- AGAINST WHICH SHE HAD BOOKED EXPENSES AMOUNTING TO RS. 6,14 ,017/- AND THUS RETURNED THE NET COMMISSION AT RS. 15,22,529/-. TH E EXPENSES CLAIMED AT RS. 6,14,017/- INCLUDES RS. 1,94,386.50 BEING DISCOUNT ALLOWED TO CUSTOMERS SHARED IN THE RATIO OF 50:50 PLUS RS. 1,33,631.50 BEING DISCOUNT ALLOWED TO CUSTOMERS SHARE IN THE RATIO OF 50:50 AND RS. 2,85, 999/- BEING SALARY PAID TO 4 MANAGERS ADJUSTED AGAINST THE COMMISSION DUE AS PER THE AGREEMENT @ RS. 10,000/- PER MONTH TO THREE PERSONS. IT APPEARS THA T THE AUTHORITIES BELOW HAVE NOT APPRECIATED THE FACTS OF THE PRESENT CASE IN RIGHT PERSPECTIVE. FACT OF THE MATTER IS THAT TOTAL AMOUNT OF COMMISSION CR EDITED BY THE ASSESSEE IN THE COMMISSION ACCOUNT IS RS. 21,36,446/- AND AS S UCH NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN. IT IS ALSO OBSERVED THAT TH E AUTHORITIES BELOW HAVE TOTALLY IGNORED THE COMMISSION ACCOUNT WHICH WAS PL ACED ON RECORD AND THE ENTRIES IN THE SAME WERE DULY RECONCILED WITH THE T DS CERTIFICATES. THUS, THERE WAS NO JUSTIFICATION IN MAKING THE IMPUGNED A DDITION IN THE ORDER PASSED U/S 154 OF THE ACT. ACCORDINGLY I DELETE THE ADDITION OF RS. 1,62,429/- MADE BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE CIT(A). 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH JUNE, 2012. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 28 TH JUNE, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 5