ITAT Orders Re adjudication of Commission and Brokerage Sales credited to P/L Account for Reliance Jio and Sun Direct Distributorships [Read Order]

The Two member bench of Bangalore  Income Tax Appellate Tribunal ( ITAT ) directs readjudication regarding the commission and brokerage sale credited to Profit and Loss Account of distributorship to Reliance Jio and Sun Directs.

The Assessee, Ginkloru Gangareddy is running a proprietary concern and engaged in the business of distributorship to Reliance Jio and Sun Direct under the trade name of “Shri Maruthi Agencies”. After filing the return of income, the assessor’s case was selected for scrutiny. 

The case was then selected for complete scrutiny under CASS on the ground that assessee has claimed large commission expenses and shown low net profit. The Assessee has raised that the commission and brokerage received amounting to Rs.26,54,109/- although declared as part of sale credited to Profit & Loss account, but the  AO on the alleged ground that the assessee has not responded to the show cause notice and in the absence of clarification/evidence, the commission receipt of Rs.26,54,109/- was added to the total income of the assessee.

Aggrieved by the order the assessee filed an appeal before the CIT(A) who dismissed the appeal. Hence the assessee filed another appeal before the tribunal. addition

During the adjudication Sai Pavani, the counsel for assessee  submitted that  during the course of assessment proceedings, all the books of accounts along with various details were submitted as mentioned in the assessment order.

Ganesh, Counsel for Revenue supported the order of lower authorities and argued that  this amount is not part of the sales disclosed by the assessee in its books of accounts. Hence, it is to be brought to tax separately

After reviewing the facts the ITAT bench of Beena Pillai, ( Judicial Member ) and Chandra Poojari (Accountant Member) directs re adjudication regarding the commission and brokerage declared as part of sale credited to Profit and Loss Account of distributorship to Reliance Jio and Sun Directs.

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