Balaji Shopping World Vs ITO (ITAT Chennai)
Summary: The Chennai Bench of the Income Tax Appellate Tribunal allowed the appeal of Sri Balaji Shopping World for AY 2023-24 and deleted an addition of ₹48,08,962 made by the Assessing Officer by treating the entire gross receipts reported in Form 26AS by BSNL and India 1 Payments Ltd. as commission income.
The assessee was engaged in mobile recharge services for BSNL and was also an authorised dealer of BSNL products. It contended that the difference between the amount reported in Form 26AS and the income recorded in its books represented trade discounts allowed by BSNL on recharge vouchers, which had been netted against the receipts.
The Assessing Officer rejected the reconciliation and treated the receipts of ₹76,38,827 reflected in Form 26AS as commission income. After allowing expenses and partner remuneration/interest, the AO made a further addition of ₹48,08,962 and initiated penalty proceedings under section 270A.
The CIT(A) upheld the addition, principally observing that the assessee had not produced revised TDS certificates, correction of Form 26AS, confirmation from BSNL or other independent corroborative evidence.
The Tribunal, however, noted that the assessee had produced a detailed reconciliation along with invoice-wise details of recharge vouchers showing the face value, discounted purchase price and margin retained. On verification, the Tribunal found that the difference between the gross amount reported in Form 26AS and the commission income disclosed in the books substantially corresponded to the trade discount allowed by BSNL.
