how to save my client

 My client is a commission agent.He has a bank account in which he has not given his PAN no.

As he is a commission agent he takes money from the customer ,keeps it in that bank account and afterwards give away this money to the supplier after keeping his commission.Now the ITO has got hold of this bank a/c for the A.Y06-07,and the transaction are also exceeding 40lacs.Now how to save my client as ITO wants to treat it as sales and charge him with interest and penalty for not doing tax audit.

pls help

Replies (1)

In case of a commission agent only his commision is his turnover and not the entire amount of purchase and sale effected by him. Hence you should confront the ITO stating that in case of a commission agent only commision is his turnover and offer the same as income.

I hope that the parties that the agent was dealing were genuine as he may be required to prove that he was acting on behalf of the principal.

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