Deduction of TDS on reimbursed expenses cannot constitute the amount the Income of the assessee

Last updated: 20 March 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Briefly stated the Assessing Officer noticed that the assessee had total receipts of Rs.1,40,54,731/- out of which Rs.1,27,70,141/- were the bills raised during the year, but the assessee accounted for the net commission at Rs.41,19,613/-. He further noticed that the TDS was deducted on total contract amount of Rs.96,32,530/-. On enquiry, assessee explained that some of the clients have deducted the tax on the reimbursed amounts also but the assessee’s net commission was only Rs.41,19,613/-. It filed various reconciliation statements. However, the Assessing Officer observed that the assessee did not explain the difference between Rs.1.40 crores and Rs.1.27 crores and further there were credits in the bank account to an extent of Rs.1.60 crores and on the basis of the TDS certificates, the difference of Rs.55,12,917/- was held to be the commission received by the assessee, not accounted. Therefore, he made the addition.

Citation :
Income Tax Officer 2(3)3 Room No.555 Aayakar Bhavan Mumbai 400020 Appellant Vs Travels & Shopping (P) Ltd Ground Floor, Dorabshaw House,Narootam Morarjee Marg, Ballard Estate Mumbai 400038 PAN No.AAACT 1396 H Respondent