Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

DCIT, Central Circle-26, New Delhi Versus Parav Builders Pvt. Ltd.

2016 (1) TMI 249 - ITAT DELHI

Disallowance of brokerage charges paid on purchase of land - CIT(A) restricted addtion - Held that:- The facts would show that the genuineness of the transaction; the existence of the party etc. stood accepted by the AO himself as brokerage to the extract of 2% has been allowed. However the basis for arbitrarily restricting the same based on suspicions to the extent of 2% as opposed to the claim of 2.8% duly supported by unrebutted evidences and facts on record is absent on record. In the absenc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

been filed by the Revenue assailing the correctness of the order dated 08.10.2014 of CIT(A)-III, New Delhi pertaining to 2008-09 assessment year on the following grounds:- 1. "On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the disallowance made towards brokerage charges of ₹ 19,19,247/- paid to M/s. Ajanta Estate & Developers on purchase of land. 2. The order of the CIT(A is erroneous and is not tenable on facts and in law. 3. The appellant cra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Ld. Sr.DR. However, the Ld. Sr.DR filed an adjournment petition stating that it needs to be argued by CIT DR. Considering the material available on record, the said request was rejected. The record shows that in the facts of the present case pursuant to the search conducted on 19.10.2010 in IREO Group of cases wherein the assessee was also covered notice u/s 153A was issued to the assessee on 30.12.2011 requiring the assessee to furnish its return. In pursuance thereto the return as originally f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

expenses. The AO in order to verify the brokerage charges issued a letter u/s 133(6) of the Act. For ready-reference, the relevant extract is reproduced hereunder:- 5. "However for verification of the details of brokerage charges a letter u/s 133(6) of the Income Tax Act was sent to the M/s Ajanta Estate & Development on 15.10.2012. The same returned unserved. Thereafter one more letter was sent vide letter no.524 dt 02.11.2012 and again no response of the same received. Vide order shee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see reiterated on facts that the said broker had assisted the assessee for procurement of land approximately 0.83 acres situated at the specific village. Further it was also pleaded that in support of the said claim the address, PAN, copy of invoice, TDS certificate etc. of the said broker had been filed. Accordingly the claim was stated to be allowable. For ready-reference, the relevant extract is reproduced from the assessment order:- "Assessee company has already discharged its primary o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ommon. There is no standard rate of brokerage for all kind of real estate deals, its wholly depends upon the facts & circumstances of the case like location, size of the land parcels, level of competition in the market, utility, need of the seller, name & goodwill of the parties etc." (emphasis provided) 3.1. However, not convinced with the claim of the assessee the AO rejected it holding that notice u/s 133(6) of the Act had been issued to the broker and he had not responded. Furth .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er pleaded that no evidence has been placed on record to justify the estimate at 2%. The adhoc disallowance in the absence of any evidence was assailed. The genuineness of the payment it was submitted has not been questioned and for restricting expenses no evidence has been placed on record. Reliance was placed upon CIT vs Walchand & Co. (P.) Ltd. [1967] 65 ITR 381 (SC);Jamna Auto Industries v CIT [2008] 167 Taxmann 192 (Punjab & Haryana High Court); CIT v Chandulal Keshavlal & Co. p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lt with the said broker in the future and infact had only one transaction with this broker. Thus in this background it was pleaded that the assessee was not in a position to put any pressure or influence on the broker as he was not related to the assessee and nor was he under his control. CIT vs Discovery Estates (P.) Ltd. [2013] 356 ITR 159 (Delhi High Court) was relied upon for the proposition that in the face of the evidences and documents on record suspicion cannot be replaced with the real .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not been disputed as brokerage to the extent of 2% has been allowed thus simply because broker does not respond to the notice u/s 133(6) the AO cannot upset the evidence and apply brokerage as per his will. The extract of the further arguments advanced before the CIT(A) found extracted in the impugned order are reproduced for ready-reference:- 1.5.2. "Moreover during assessment proceedings Appellant submitted the copy of Sale Deeds, which clearly contains the name of Mr.Pawan Kumar propriet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

with the land purchase transaction. We are enclosing herewith the copy of sale deed as Annexure 3 which substantiates the identity of Broker. It may further be clarified that even though the Ld.AO has alleged that the notice u/s 133(6) went unserved but still he was satisfied regarding the genuineness of brokerage as he has very well accepted the presence of broker in the land deal and has allowed brokerage to the extent of ₹ 4744740/- paid to Ajanta Estate and Developer but arbitrarily o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to enforce his personal attendance. As it has no pressure or influence on the broker. But the office of Ld.AO is empowered by civil court powers to enforce the attendance of any person but it may be noted that in the instant case the Ld.AO has not issued notice u/s 131 of the Act to enforce the attendance of this person. Therefore, it is unlawful to allege that the appellant company has failed to produce the broker before Ld.AO as he was under no obligation to do so. Therefore appellant cannot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

guments, the CIT(A) came to the following conclusion:- 4. "I have gone through the above submission of the appellant and have considered the facts and evidences on record and the case law relied upon by the appellant. It is seen that the AO has not disputed the purchase of land from Mr.Virender K. Khosla amounting to ₹ 23,72,37,000. Further from the perusal of purchase deed, it is also seen that the witness to the transaction is one Mr. Pawan Kumar who is the proprietor of M/s Ajanta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

okerage expenses but he has restricted the expenses to the extent of 2% instead of 2.80% paid by the appellant. This part disallowance is primarily made because notice under section 133(6) was not complied with by M/s. Ajanta Estate & Developer and also failure on the part of the appellant to produce the representative of M/s. Ajanta Estate. In my humble view, the onus was duly discharged by the appellant by filing the requisite details with the AO and the AO had ample powers under the Act t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

There was no concrete evidence and material available with the AO to hold that the brokerage expenses are excessive and it being the search case, no evidence was either found during the search regarding the bogus or disproportionate expenses. Hence, in view of the above discussion and also without any inquiry and any adverse material, an adhoc disallowance made by the AD towards the brokerage expenses deserves to be deleted." (emphasis provided) 6. Aggrieved by which the Revenue is in appea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

been elaborated in the earlier part of this order and in the absence of any infirmity in the impugned order the request of the Sr. DR was rejected as no prayer for rebutting the facts on record was made. In the circumstances where on facts there is no dispute and no infirmity in the impugned order is brought out it was pronounced that the departmental appeal would be dismissed. However subsequently Mr. Goel appeared alongwith the Bench Clerk and stated that he was delayed accordingly his Power .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version