Madho Bihari Agrawal Vs ACIT (ITAT Indore)
TDS Compliance ≠ Expenditure – ITAT Indore Deletes ₹1.46 Cr Addition Made via Section 154 Rectification; ITAT Indore: Addition Under Section 69C Deleted as Commission Was Not Assessee’s Own Expense; ITAT: No Unexplained Expenditure When Commission Paid for Clients, Not from Assessee’s Own Business; Section 69C Inapplicable Where Commission Is Not Debited in Assessee’s Books, Rules ITAT Indore; ITAT Indore Quashes ₹1.46 Crore Addition: Mere TDS Disclosure in Form 3CD Doesn’t Prove Unrecorded Expense; ITAT Clarifies: TDS on Commission Does Not Mean Expense Belongs to Assessee; ITAT Indore: Rectification Order Invalid as Section 154 Can’t Be Used for Debatable Additions; ITAT Deletes Section 69C Addition Made on Basis of Audit Report Figure Alone; ITAT Indore: Section 69C Addition Unsustainable When Assessee Acts Only as Commission Agent.
Assessee, a commission agent in banana trade, had filed return declaring income of ₹2.61 crore, which was originally accepted in scrutiny assessment. Later, the AO issued a rectification notice u/s 154, alleging that commission payments of ₹1.46 crore (reported in Form 3CD, Clause 34(a)) were not debited to P&L & hence represented unexplained expenditure u/s 69C.
Assessee explained that such commission was paid on behalf of clients to other agents, duly subjected to TDS u/s 194H, & therefore never claimed as his business expense. The CIT(A)/NFAC, however, upheld the addition.
