TDS mismatch and commission income: only the amount actually received could be taxed in the assessee's hands.

Where TDS credit reflected a larger amount than the commission income shown in the books, the addition was held unsustainable because the assessee's actual income was separately evidenced. The books recorded commission of Rs. 3,17,699 from Aircel, and the balance amount linked to the TDS entry was shown to have been paid directly to retailers toward recharge commission and activation charges. Since Aircel's correspondence confirmed that only the commission amount was paid to the assessee, the excess could not be treated as income in the assessee's hands merely because TDS was deducted on it. Relief was therefore granted.

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Issues: Whether the addition made on account of mismatch between TDS credit and income declared, including the enhancement made by the first appellate authority, was justified when the assessee's commission income stood separately evidenced.

Analysis: The assessee's books showed commission from Aircel at Rs. 3,17,699/-, while the balance amount reflected against the TDS entry represented payments made directly to retailers towards recharge commission and activation charges on behalf of the assessee. The correspondence from Aircel confirmed that only Rs. 3,17,699/- was paid to the assessee and the remaining amount was disbursed to retailers. On this factual basis, the amount actually accruing to the assessee was only the commission credited in the accounts, and the larger sum could not be treated as income in the assessee's hands merely because TDS was reflected against it.

Conclusion: The addition and enhancement were not sustainable, and the assessee was entitled to relief.

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