I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 1 of 9 IN INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA Before Shri P.M. Jagtap, Accountant Member I.T .A. No. 1151/KOL/ 2015 Assessment Year: 2010-2011 Smt. Nirm ali Bhadra Ghosh,....................... ......................Appellant C/o. Mr. San jib Chakraborty, Ashirbad Apartment, 113, Rishi Aurobindo Road, Hakikpara, P.O. Si liguri, Dist. Darjeeling-734 001 [PAN: AEQPN 2631 C] -Vs.- Assistant Commissioner of Income Tax,.... ........................Respondent Circle-3, Si liguri, Aayakar Bhawan, Matigara (Si liguri ), Dist. Darjeeling-734 010 Appearances by: Shri Sanjib Chak rabo rty, Advocate, for assessee Mrs. Sarbari Mukhopadhyay, Addl. CIT, D.R., for Department Date of concluding th e hearing : Au gust 01, 2016 Date of pronouncing order : October 04, 2016 O R D E R This appeal filed by assessee is directed against order of ld. Commissioner of Income Tax (Appeals), Siliguri dated 13.07.2015. 2. issue raised in Grounds No. 1 & 2 relates to addition of Rs.11,16,426/- made by Assessing Officer and confirmed by ld. CIT(Appeals) on account of alleged undisclosed commission. 3. assessee in present case is individual, who is carrying on business as commission agent of M/s. Unipay2U Marketing Private Limited, Chennai. return of income for year under consideration was filed by her on 29.03.2011 declaring total income of Rs.11,16,750/-. During course of assessment proceedings, it was noticed by Assessing Officer from TDS certificates issued by M/s. Unipay2U I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 2 of 9 Marketing Private Limited that total commission of Rs.21,82,585/- was paid to assessee, whereas in her return of income, assessee had shown commission income of Rs.10,66,159/- only. assessee, therefore, was called upon by Assessing Officer to explain this difference. In reply, following explanation was offered by assessee in writing:- I was investor cum commission holder of company called Unipay2U Marketing Pvt. Ltd. of No. 5, Vinayagam Pet street Saidapeet, Chennai, Pin-600015, Tamil Nadu.The business of company was non banking financial activity operated through internet. They used to collect investments with promise of some exceptional high rate of return. All promise as well as activities of company became fake and fraudulent. modus operandi of company was such that interested proposed investor has to invest money to company through existing investor as investor. existing investor used to receive some-commission from said company out of said amount received and deposited by him on behalf of fresh investor. entire documents, details, particulars, accounts, information and others were maintained by company never was communicated to any investor properly. Some of them were available in their official web site, but were not available to take print of same. Now company has shut down their official website and totally has stopped any communication with investor. Actually I have earned sum of Rs.10,66,159/= as commission from said company for AY. 2010-11 out of which sum of Rs.2,39,133/- was paid to me during said year and balance amount of Rs.8,27,026/- was still receivable by me as on 31/0312010. details furnished by company in Form No. 16A, showed mot sum of Rs. 21,82,585/= was credited in my name as commission, same is totally false, baseless and never been paid to me. Myself is never accountable for false particulars furnished by others and should not be taxed on that. truth of my claim could be observed from my bank transaction. Any contrary of same, your honour is hereby requested to arrange cross examination by me of said company or rely on my statement and documents submitted by me . above explanation of assessee was not found acceptable by Assessing Officer. According to him, books of account and Bank I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 3 of 9 statements produced by assessee did not show actual business created by assessee on behalf of M/s. Unipay2U Marketing Private Limited. He was also of opinion that books of account produced by assessee did not show clear picture as regards basis of which commission was paid to her by said Company. assessee also could not furnish details of actual understanding and agreement with said Company. Assessing Officer, therefore, proceeded to take amount of commission received by assessee from M/s. Unipay2U Marketing Private Limited at Rs.21,82,585/- as shown in relevant TDS certificates and made addition of Rs.11,16,426/- to total income of assessee on account of undisclosed commission income. 4. addition made by Assessing Officer on account of alleged undisclosed commission income was challenged by assessee in appeal filed before ld. CIT(Appeals) and in support of her case on this case, following submissions were made on behalf of assesese before ld. CIT(Appeals):- (i) ld. ACIT relied on erroneous and baseless details provided in Form No. 16A by Unipay 2U Marketing Pvt. Ltd. of No. 5, Vinayagam Pet Street, Saidapet,Chennai, PIN- 600015, Tamilnadu (page no. 3 to 8 of paper book). said Co, mentioned in three Form No.16As that sum of Rs.21,82,585/- in total was paid or credited to me. claim was proved false from my Form 26AS (Page No. I to 2 of Paper Book) because same Co. in their TD.S. returns submitted to Income Tax Department shown different amount as Rs.3,95,030/- in total as paid or credited to me by them. ii) ld. A.C.I.T. never allowed reasonable opportunity to me to confront by issuing Notice under section 131 or / and under section 133(6) to said Unipay 2U Marketing Pvt. Ltd. and / or to Tax Deductor, issued those said Form No.16As to arrange cross examination by me as demanded vide submission dated 08-03-2013 (Page No. 9 to 10 of Paper Book). iii) Ld. A.C.l.T. never tried to collect and verify actual transaction details of mine with said Co. from said Unipay 2U Marketing Pvt. Ltd. by asking them to I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 4 of 9 provide same. Instead of tind out fact she completely relied on mare surmise and failed to provide any verified document 1 evidence in support of that addition. iv) Ld. ACIT completely misunderstood nature of business of said Unipay 2U Marketing Pvt, Ltd. and method of calculation of commission paid or payable by them to me. It was repeatedly explained to her that modus operandi of them was based on binary system. In this system every investor is investor cum agent and has to invest money as well as join business using code provided by Co. to existing investor. Co. had distributed commission out of money collected by them to said code holder and to every investor cum agent of upper slab of pyramid under whose chain code holder has invested or joined as per different slabs. Hence commission distributed to me was not only on basis of amount collected by me from new investor but of other new investors who had joined and invested by using code of persons of my down line. Hence, addition made based on doubt put by Ld. A.C.I.T. in Para No.- 2 of Page No.- 4 of Assessment Order as "It is hard to accept that said company had given commission of Rs.10,66,159/- only on investment deposited of Rs.7,17,488/- collected by assessee" is totally baseless . 5. ld. CIT(Appeals) did not find merit in above submissions made on behalf of assessee and rejecting same, he proceeded to confirm addition of Rs.11,16,426/- made by Assessing Officer on account of alleged undisclosed commission income for following reasons given in paragraph nos. 4.2 & 4.3 of his impugned order:- 4.2. I have duly considered submission of Ld. AR and consulted assessment records. appellant filed her return on 29/03/2001, declaring total income of Rs.11,16,750/- under head 'Profit & Gains from business' and computed tax liability at Rs.2,43,325/-. In said return, appellant computed tax payments as (i) Advance Tax - Rs.25,000/- and (ii) TDS - Rs.2,18,325/-. In support of TDS credit, appellant filed three Form 16A alongwith return under her own signature. From figure of TOS mentioned in return and supporting evidences filed alongwith return, AO found out that appellant though earned commission income to tune of Rs.21,82,585/- from Unipay2U Marketing Pvt. Ltd but I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 5 of 9 disclosed only Rs.10,66, 159/. AO had not collected any information from anywhere besides relying upon return of income and documents filed alongwith return. 4.3. ld. A.R. of appellant in his submission slated that AO, in spite of his request, did not issue notice u/s. 131 or u/s. 133(6) of Income Tax Act, so that appellant could confront or cross-examine LJnipay2U Marketing Pvt. Ltd. In fact, same argument has been made during appeal proceedings also. This is bizarre argument. Collection of information from business associates or from third parties by issuing notice u/s. 133(6) or summoning them Ior interrogation is solely AO's prerogative. assessee can only insist for cross- examination if AO decides to use any information collected from business associates or third parties against assessee. In this case, AO had not collected any information from outside. She only used data available in return of income filed by appellant under her own signature. Thus, there existed no issue for allowing cross-examination. Onus was squarely on appellant to establish her claim that she received less commission than what was mentioned in Form 16A, especially when she claimed full credit or TDS of Rs.2,18,325/- in her return of income and set off tax liability accordingly . While confirming addition made by Assessing Officer on account of alleged undisclosed commission income, ld. CIT(Appeals), however, directed Assessing Officer to allow full credit of TDS amounting to Rs.2,18,325/- as shown in relevant TDS certificates issued by M/s. Unipay2U Marketing Private Limited. 6. I have heard arguments of both sides on this issue and also perused relevant material available on record. As submitted by ld counsel for assessee, information given by M/s. Unipay2U Marketing Private Limited in relevant TDS certificates regarding commission paid to assessee was not correct and this position was clear even from TDS returns filed by said party, wherein altogether different figures were furnished. He contended that Assessing Officer, however, relied on wrong TDS certificates issued by said party to draw adverse inference against assessee in matter of alleged I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 6 of 9 undisclosed commission income without making any further enquiry with said party or without giving any opportunity to assessee to cross examine said party. He has contended that this matter may, therefore, be sent back to Assessing Officer for giving such opportunity to assessee. Keeping in view all facts of case as well as relevant material placed on record, I find merit in this contention of ld. counsel for assessee and since even ld. D.R. has not raised any objection in this regard, I set aside impugned order of ld. CIT(Appeals) on this issue and restore matter to file of Assessing Officer for deciding same afresh after giving assessee proper and sufficient opportunity of being heard. Grounds No. 1 & 2 of assessee s appeal are accordingly treated as allowed for statistical purposes. 7. issue raised in Ground No. 3 relates to addition of Rs.5,92,100/- made by Assessing Officer and confirmed by ld. CIT(Appeals) on account of unexplained cash deposits found to be made in Bank account of assessee. 8. During course of assessment proceedings, it was noticed by Assessing Officer from relevant Bank statements of assessee with Axis Bank that there were four cash deposits made on different dates aggregating to Rs.5,92,100/-. Since said deposits were not reflected in cash book of assessee and no satisfactory explanation in this regard could be offered by assessee, he treated said cash deposits as unexplained and made addition of Rs.5,92,100/- to total income of assessee. addition of Rs.5,92,100/- made by Assessin g officer on account of unexplained cash deposits in Bank accounts was challenged by assessee in appeal filed before ld. CIT(Appeals) and following submission was made by assessee before him in support of her case:- reason for not showing those cash deposits mentioned in Para 1.2. in Page No. 5 of Assessment Order in my I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 7 of 9 cash book is that, amounts were deposited by new investors directly by them to my given bank accounts. said investors actually have deposited those amounts with intention to invest in company called Unipay 2U Marketing Pvt. Ltd. of No. 5, Vinayagarn Pet Street, Saidapet, Chennai, PIN- 600015, Tamilnadu as investment deposit. I have only collected those amounts on behalf of company to perform my duty as commission agent. company had paid me commission for such act. payment of commission by company is clear evidence of same. particulars of those investors were furnished before Ld. A.C.I.T. Since I have never received those amounts in my hand, receipts wasn't shown in cash book as per norms of accountancy. But same were perfectly shown elsewhere in said books of accounts and produced before Ld. A.C.I.T. for verification. addition in absence of any contrary evidence is unlawful . 9. above submission made by assesee was not found acceptable by ld. CIT(Appeals) and he proceeded to confirm addition made by Assessing Officer on account of unexplained cash deposits for following reasons given in paragraph no. 5.2 of his impugned order:- 5.2. I have duly considered submission of appellant. AO found that sum of Rs.5,92,100/- were deposited in appellant's bank accounts by cash without having any corresponding entries in cash book and added same as unexplained cash credit. appellant explained that some new investors deposited said cash directly in her bank accounts for investments in Unipay2U Marketing Pvt. Ltd. However, Ld. AR did not file any corroborative evidence in support of his claim. reconciliation statement of cash book vis-a-vis bank deposits also could not be presented for verification. In any case, all cash deposits in hank, whatever may he name or source, should have corresponding entries in cash book. Otherwise, accounts cannot be properly tallied. In case of mistake or omission or commission, onus is on appellant to reconcile same with corroborative evidences. appellant could not do so. In circumstances, I have no other option but to confirm decision of AO. addition of Rs.5,92,100/- is therefore, sustained . I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 8 of 9 10. I have heard arguments of both sides on this issue and also perused relevant material available on record. As submitted by ld. counsel for assessee before ld. CIT(Appeals) and further reiterated before me at time of hearing, relevant cash deposits were made by new investors directly in Bank accounts of assessee with intention to invest said amounts with M/s. Unipay2U Marketing Private Limited. According to him, these amounts thus were collected by assessee on behalf of said Company as commission agent and since said amounts were directly credited to concerned parties account, same were not reflected as cash deposits in cash book of assessee. As rightly contended by ld. counsel for assessee, it appears that authorities below, however, have failed to appreciate this stand of assessee and proceeded to add amounts in question found deposited in Bank accounts of assessee in her hand without proper verification. At time of hearing before me, even ld. D.R. has not been able to dispute this position. He, however, has contended that this matter may be sent back to Assessing officer for verifying stand of assessee from relevant record. I find merit in this contention of ld. D.R. impugned order of ld. CIT(Appeals) on this issue is accordingly set aside and matter is restored to file of Assessing Officer for deciding same afresh after verifying stand of assessee from relevant record. Ground No. 3 of assessee s appeal is accordingly treated as allowed for statistical purposes. 11. In result, appeal of assessee is treated as allowed for statistical purposes. Order pronounced in open Court on October 04, 2016. Sd/- (P.M. Jagtap) Accountant Member Kolkata, 4 t h day of October, 2016 Copies to : (1) Smt. Nirm ali Bhadra Ghosh, I . T. . N o. 1 1 5 1 / KO L . / 2 0 1 5 Assessment year: 2010-2011 Page 9 of 9 C/o. Mr. San jib Chakraborty, Ashirbad Apartment, 113, Rishi Aurobindo Road, Hakikpara, P.O. Si liguri, Dist. Darjeeling-734 001 (2 ) Assistant Commissioner of Income Tax, Circle-3, Si liguri, Aayakar Bhawan, Matigara (Si liguri ), Dist. Darjeeling-734 010 (3) Commissioner of Income Tax(Appeals), Siliguri; (4) Commissio ner of Income Tax- , (5) Depart ment al Represent ative (6) Guard File By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. Nirmali Bhadra Ghosh v. Assistant Commissioner of Income-tax, Circle-3, Siliguri