TMI Blog2012 (8) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... een the assessee and its sister concern SPL will not allow the assessee to divert its income to the sister concern. Since the rendering of services for which income was not only accrued but also received by the assessee, we do not see any reason for not offering the same in assessee’s hands. It was actual income of the assessee, therefore, the AO was justified in making addition of income actually earned and received by the assessee during the year under consideration. Merely because this income was offered by SPL in its return of income will not exonerate the assessee from inclusion of such income in its return which was earned and received by it – Decided against assessee - I.T.A.No. 24/Ind/2012 - - - Dated:- 12-6-2012 - SHRI JOGIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r it was also stated that brokerage received by the DSP Finprints Ltd. for this particular job was fully passed on to Sandhya Prakash Ltd. The reply and explanation submitted by the assessee was not found to be acceptable by the Assessing Officer because both companies are sister concern and mere signing the MOU, the assessee will not be saved from taxation on the brokerage/commission on the sale of land belonging to Mr. Shaukat Mohd. Khan and others. 4. By the impugned order, the ld. CIT(A) confirmed the brokerage income in assessee s hands after having the following observations :- 5.4 I have carefully considered the submission of the appellant, the observation of Assessing Officer as also relevant facts relating to this issue. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently, appellant company received the brokerage payment from the seller parties as per the detail below :- Date Name of the seller Party Amount of Brokerage Mode of Payment 14.08.2011 Shokat Mohd.Khan 38,40,000 Ch.No.127947 Bank of India 14.08.2011 Serwar Mohd. Khan 38,40,000 38,40,000 917764 ICICI Bank 14.08.2011 Zafar Mohd Khan 38,40,000 289004 State Bank of India 14.08.2011 Muzaffar Mohd.Khan 38,40,000 274085 Bank of India 14.08.2011 Dr. Tajwar Mohd.Khan 38,40,000 051857 and 207259 Sri Satya Sai Nagrik Bank and State Bank of India It is also noticed that all suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch deals. All these facts prima facie indicate that the work relating to the brokerage income was ~ in fact carried out by the appellant company but subsequently, with a malafide intention to avoid the proper payment of taxes, the appellant company tried to divert this income in the hand of its sister concern namely M/s. Sandhya Prakash Ltd. During the appellate proceedings, the appellant has also filed a copy of resolution passed by M/s Sandya prakash Ltd. dt 26/06/2007 the said resolutions reads as under :- "The Chairman informed the Board that as the Company has been approached by the sons of Lt. Asghar Mohd. Khan, who are the rightful owners of land admeasuring 10.96 acres situated at Khasra No. 74/2/1 Prempura, Bhopal to assist the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited." The appellant also filed a copy of memorandum of understanding dt. 03/07/2007 between M/s . Sandhya Prakash Ltd. and the appellant company and as per this memorandum of understanding it was agreed between the two parties that the brokerage which will be received by DSP Fin Pvt. Ltd. will be fully passed on through M/s. Sandya Prakash Ltd. I have carefully perused these documents it is noticed that M/s .Sandhya Prakash Ltd. and the appellant company are sister concern. The resolutions passed by these two companies are only internal documents to justify their claim of commission income in the case M/s. Sandhya Prakash Ltd. It is also noticed that the memorandum of understanding dt. 03/07/2007 between the two companies is not sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at brokerage income was received by the assessee in respect of services rendered by it for sale of land. All the work relating to brokerage income was undertaken by the assessee company, but this income was not offered in the return of income filed by the assessee. Contention of the ld. Authorized Representative was that this income was earned by sister concern of the assessee M/s. Sandhya Prakash Limited (SPL). He invited our attention to the MOU drawn between the assessee and SPL to indicate that work was to be performed by the assessee and passing of commission to SPL. However, detailed finding has been recorded by both Assessing Officer and CIT(A) to the effect that commission income was not only earned by the assessee but the service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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