| The Tax Publishers2020 TaxPub(DT) 4167 (Ctk-Trib) INCOME TAX ACT, 1961
Section 199 Rule 37BA(2)
Where assessee was a distributor and received commission, but assessee claimed that commission as shown in form 26AS was directly paid to the retailers and, therefore, above commission was never the income of the assessee, issue was restored back to file of AO with direction to verify, as to whether the recipients (retailers) claimed tax deducted at source in their respective returns or not, and if AO finds that they did not claim tax so deducted, then claim of the assessee was to be allowed.
|
Tax deducted at source - Credit for tax deducted - Income related to credit for tax deducted claimed to be credited partly in assessee's profit and loss account and balance in other recipients -
Assessee was a distributor of Reliance Telecom Ltd. (RTL) and received commission for goods sold on behalf of RTL. AO noticed that as per Form No. 26AS, RTL paid commission to the assessee on which, tax was deducted at source. Further, AO noticed that assessee did not credit said commission in profit and loss account. In reply to AO's query, assessee explained that RTL directly paid commission to the retailers, therefore, above commission was never the income of the assessee. AO relying on the provisions of rule 37BA(2) of the Income Tax Rules, 1962, allowed part credit pertaining to amount shown in profit and loss account (Rs. 4,04,800) to assessee and disallowed balance amount ( Rs. 12,88,214). Held: Assessee explained that RTL directly paid commission to the retailers and, therefore, the above commission was never the income of the assessee. In case of Sunita Devi, on similar issue, AO was directed to verify, as to whether any credit of the tax deducted at source was allowed by revenue department in hands of recipients of the commission or not and if same was not allowed, then credit of said amount should be given in hands of assessee. Issue was restored back to file of AO with direction to verify, as to whether the recipients (retailers) have claimed tax deducted at source in their respective returns or not, and if AO finds that they did not claim tax so deducted, then claim of the assessee should be allowed.
Followed:Sunita Devi v. ACIT 2015 TaxPub(DT) 3495 (Del-Trib).
REFERRED : CIT v. Relcom (2015) 286 CTR 102 (Del) : 2015 TaxPub(DT) 4371 (Del-HC), Arvind Murjani Brands (P.) Ltd. v. ITO 2012 TaxPub(DT) 2466 (Mum-Trib), Supreme Renewable Energy Ltd. v. ITO 2010 TaxPub(DT) 173 (Chen-Trib) and Escorts Ltd. v. Dy. CIT 2007 TaxPub(DT) 1231 (Del-Trib).
FAVOUR : Matter remanded.
A.Y. : 2014-15
IN THE ITAT, CUTTACK BENCH
 SUBSCRIBE FOR FULL CONTENT
|