IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER &

SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील स.ं /ITA No.470/SRT/2024 Assessment Year: 2016-17 (Hybrid hearing)

Dhanuben Ramanbhai Income Tax Officer Ward-2(3)(7), Sonavadiya बनाम/ Surat, Anavil Business Center, A-1/102, Omkar Residency, Vs. Adajan Hazira Road, Adajan, Palanpur, Mahidharpura, Surat-395 007 Surat- 395 009 èथायीलेखासं./जीआइआरसं./PAN/GIR No: EBEPS 7022 D (अपीलाथ(cid:334)/Appellant) ((cid:366)(cid:529)थ(cid:334) /Respondent)

(cid:467)नधा(cid:91)(cid:464)रती क(cid:551) ओर से

/Appellant by Shri Sapnesh R Sheth, Advocate Shri Ajay Uke, Sr-DR राजèव क(cid:551) ओर से /Respondent by Date of Hearing 29/07/2025 सुनवाई क(cid:551) तार(cid:547)ख/

उ(cid:622)घोषणा क(cid:551)

तार(cid:547)ख/Date of Pronouncement 27/08/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM:

This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 08.04.2024 by the National Faceless Appeal Centre, Delhi/Commissioner of Income-tax (Appeals) [in short ‘Ld. CIT(A)’] for the Assessment Year (AY) 2016-17, which in turn arises out of assessment order passed by Assessing Officer (in short, ‘AO’) u/s 143(3) of the Act dated 11.12.2018. Grounds of appeal raised by the assessee are as under:

1. On the facts and in the circumstances of the case as well as the law on the subject, the learned CIT(A), NFAC has erred in confirming the action of Assessing Officer in making disallowance of commission expense of Rs.88,81,886/-.

2. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”

2. Facts of the case in brief are that appellant filed return of income on 17.10.2016 for A.Y 2016-17 declaring total income of Rs.13,79,990/-. Notices u/s 143(2) and 142(1) were issued to the assessee. The assessee had claimed commission expenses amounting to Rs.88,81,886/-. The assessee was asked to furnish complete details of the persons to whom commission was paid. However, assessee furnished only copy of ledger accounts and did not furnish other details including TDS on such commission payment. As the nature and quantum of work provided by the persons as well as agreement amongst the assessee and the recipients were not provided, the AO disallowed the entire commission expenses of Rs.88,81,886/-. He also disallowed salary expenses of Rs.10,97,445/-. The total income was determined at Rs.1,13,59,320/- as against returned income of Rs.13,79,990/-. Aggrieved by the addition made by AO, assessee preferred appeal before CIT(A).

3. Before CIT(A), the assessee filed written submission dated 25.08.2021 wherein it was stated that the assessee is a Direct Sales Agent (DSA) of various banks and other non-financial institutions such as ICICI Bank Ltd., Capital First Ltd., Magma Fincort Ltd., Bajas Finance Ltd. etc., This is evident from From- 26AS. As a DSA, assessee needs to find potential customers in need of finance from the Banks and financial institutions. For that, assessee has to take service of various agents who are in touch with persons requiring such finance. The assessee needs to pay commission to the referral agents to bring customers. The assessee submitted that she had submitted ledger confirmation of parties for Rs.88,78,295/- out of total commission expenses of Rs.88,81,886/-. The assessee also submitted PAN and Aadhar card of the agents for Rs.55,05,345/-. It was submitted that all payments were through banking channel which proves genuineness of the expenses. The assessee submitted that the ratio of commission expenses to the total commission income was 64.85% in the year under consideration as against 56.88% and 70.47% in AYs 2017-18 and 2018- 19 respectively. Hence, there is no major fluctuation in the ratio of commission expenses. It was further submitted that the assessee was not liable to deduct TDS for the year under considerat