Case Law Details
Ginkloru Gangareddy Vs ITO (ITAT Bangalore)
In the case of Ginkloru Gangareddy vs. ITO, the appellant, a proprietor running a business named “Shri Maruthi Agencies,” engaged in distributorship for Reliance Jio and Sun Direct, filed their original return for the assessment year 2020-21, declaring a total income of Rs. 5,47,610/-. The case was selected for scrutiny due to the large commission expenses claimed and the low net profit shown.
The primary issue raised by the appellant was the addition of commission and brokerage receipts amounting to Rs. 26,54,109/- to their total income. Although the appellant declared this amount as part of sales credited to the Profit & Loss account, the assessing officer (AO) added it to their total income due to alleged non-response to a show-cause notice and lack of clarification/evidence.
The appellant contended before the Income Tax Appellate Tribunal (ITAT) that they had submitted the sales ledger to substantiate the AO’s query, and the income reflected in Form 26AS had already been included in the return of income declared, leading to potential double taxation. Additionally, the appellant, being illiterate, claimed inability to provide further reconciliation, arguing that the AO had passed the order without proper verification.
The ITAT observed discrepancies between the appellant’s claimed sales and commission received, as per Form 26AS, subject to TDS deductions. The tribunal concluded that the issue required examination by the AO, considering reconciliations with Form 26AS, and remitted the matter back to the AO for fresh consideration.
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