2018 (9) TMI 1997 - AT - Income Tax

Mismatch of TDS credit claimed and 26AS (TDS data base of the Department) - HELD THAT - From a perusal of the P L Account, we note that the assessee has shown the commission received from Aircel which is the same figure as reflected in the letter dated 08.02.2012, which is stated in the letter written by Aircel pursuant to the notice of AO. CIT(A) has referred to the letter dated 28.12.2010 from M/s. DWL (Aircel) wherein it has confirmed the payment which also tallies with the figure as referred to in letter dated 08.02.2012 which has been reproduced above. Commission attributable to the assessee as his income is only ₹ 3,17,699/- and , therefore, assessee cannot be saddled with the addition of amount which has not been disbursed to the assessee by Aircel. Allow the appeal of the assessee.

Summary

Issues:
1. Addition of &8377; 62,27,292/- and &8377; 2,85,366/- based on TDS credit mismatch.

Analysis:
The main issue in this case pertains to the addition of amounts totaling &8377; 62,27,292/- and &8377; 2,85,366/- by the Ld. CIT(A) based on a mismatch of TDS credit claimed by the assessee and the TDS data in the Department's records. The AO added the initial amount of &8377; 62,27,292/- to the assessee's total income, which was reportedly received from the principal company. The Ld. CIT(A) further enhanced this addition by &8377; 2,85,366/- based on confirmation from the principal company regarding payments made to the assessee. The appellate tribunal was approached by the assessee against this decision.

Upon hearing the submissions and examining the case details, it was revealed that the assessee, a distributor under the principal company, had shown a total turnover of &8377; 2,24,22,061/- with a commission received of &8377; 3,17,699/-. The dispute arose from the commission payments made by the principal company directly to retailers, which were reflected as TDS credit on the assessee's account. The appellate tribunal noted that the actual commission attributable to the assessee was only &8377; 3,17,699/-, as clarified by the principal company in a letter dated 08.02.2012. This clarification aligned with the figures in the P&L account and previous correspondence. Consequently, the tribunal concluded that the assessee should not be held liable for amounts not disbursed to them by the principal company.

In light of the evidence presented and the clarification provided by the principal company, the appellate tribunal allowed the appeal of the assessee. The tribunal's decision was based on the fact that the commission income attributed to the assessee was accurately reflected in the records, and the disputed amounts were not actually received by the assessee. Therefore, the addition of &8377; 62,27,292/- and &8377; 2,85,366/- was deemed unwarranted, leading to the allowance of the assessee's appeal against the Ld. CIT(A)'s decision.