The Tax Publishers2020 TaxPub(DT) 4290 (Kol-Trib)


Section 143(3)

Ad hoc disallowance of commission paid to sub-agents, without considering necessary details filed by assessee, could not be upheld.

Assessment - Ad hoc disallowance - Assessee filed all the relevant details to support impugned payments -

Assessee, a distributor and commission agent in telephone/mobile services, claimed deduction of commission paid to sub-agents. AO disallowed 15% thereof on the ground that assessee failed to file the relevant details evidence regarding sub broker re-charges payments. Held: Assessee had filed detailed paper book(s) running into 128 pages and a certificate to substantiate that corresponding e-re-charges amount involved a sum of Rs. 2,35,11,268 including commission of Rs. 1,13,06,268 and re-charge(s) figure of Rs. 1,22,05,000; respectively as per the relevant understanding between the parties. There was no rebuttal to this clinching fact coming from revenue's side. Assessee had also placed on record relevant details of all corresponding re-charge transactions. Accordingly, ad hoc disallowance made by AO was not justified.


FAVOUR : In assessee's favour.

A.Y. : 2013-14



Sri Nabarun Kanti Saha v. ACIT

ITA No. 1383/Kol/2017

9 October, 2020

Appeal Allowed.

Appellant by: Soumitra Choudhury, Advocate

Respondent by: Dhrubajyoti Ray, JCIT, Sr. DR


S.S. Godara, J.M.

This assessee's appeal for assessment year 2013-14 arises against the Commissioner (Appeals)-Burdwan's Order, dated 31-3-2017, passed in case No. 16/Commissioner (Appeals)/ACIT/Cir:2/Bwn/2016-17 under section 143(3) of the Income Tax Act, 1961; in short 'the Act'.

Heard both the parties. Case file perused.

2. The assessee's sole substantive grievance raised in the instant appeal seeks to reverse both the lower authorities action disallowing/adding 15% of the sub-agent commission involving payments of Rs. 2,35,11,268; coming to Rs. 35,26,690; in the course of assessment framed on 8-3-2016 and affirmed in the Commissioner (Appeals)'s order under challenge.

3. We advert to the relevant facts and find that the assessee/individual is a distributor and commission agent in telephone/mobile services. He runs his proprietorship business in the name and style of M/s. Saha Communication in Parulia. The assessee had claimed the impugned sub-agent of Rs. 2,35,11,268 to have been paid to various sub-agent(s) whilst carrying out distribution and commission agent business in communicative services. The assessing officer inter alia noted in his assessment order that he had failed to file the corresponding books of account regarding the impugned sub broker re-charges payments despite having being afforded various opportunities on 19-11-2015, 18-12-2015, 13-1-2016, 25-1-2016, 8-2-2016, 16-2-2016 as well as on the date of assessment (supra). This made the assessing officer to invoke the impugned ad hoc disallowance @ 15% coming to Rs. 35,26,690.


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