Sunil Kapoor v. ACIT - Taxpublishers.in

Case Laws Analysis
REFERRED Ashwin Kapur v. ACIT 2023 TaxPub(DT) 7705 (Del-Trib)
REFERRED N. Govindaraju v. ITO & Ors. 2015 TaxPub(DT) 2918 (Karn-HC)
REFERRED CIT & Anr v. Venkata Rajendran 2015 TaxPub(DT) 2278 (Karn-HC)

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The Tax Publishers2024 TaxPub(DT) 1766 (Del-Trib) IN THE ITAT DELHI BENCH G.S. PANNU, V.P. & ASTHA CHANDRA, J.M. Sunil Kapoor v. ACIT ITA No. 3314/Del/2023 8 April, 2024 Assessee by: Rajiv Tyagi, Advocate Department by: Vizay B. Vasanta, CIT-DR ORDER *Astha Chandra, J.M.* The appeal filed by the assessee is directed against the final assessment order of Learned Asstt. Commissioner of Income Tax, Circle Int. Tax (2)(1)(2) New Delhi (AO) dated 25-9-2023 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 (the Act) pursuant to the directions of Learned Dispute Resolution Panel (DRP) pertaining to the assessment year (assessment year) 2021-22. 2. The assessee has raised the following grounds of appeal:- 1. The learned assessing officer and DRP-2 while disallowing the Brokerage expense of Rs. 45 Lakh failed to appreciate that the Brokerage Commission paid by the Appellant to the 3 Brokers was duly supported by the Tax invoices issued by the 3 Brokers which contained their full addresses amongst other details. During the course of the Assessment proceedings the 3 Brokers had again issued Confirmation Letters with regard to the Brokerage paid to them by the Appellant. The Appellant had placed on record the PAN details of the 3 Brokers. Thus all the primary facts relating to the payment of the Brokerage Commission paid by the Appellant to the 3 Brokers, had been brought on the record of the Assessing Authority by the Brokerage Commission paid by the Appellant to the 3 Brokers in the relevant financial year 2020 and the corresponding payment were made through cheques by Appellant. Thus both the source of payment as well as payment documented. 2. The learned assessing officer and DRP-2 while disallowing the brokerage expense of Rs. 45 Lakh erred in appreciating the fact that Appellant providing the by the payment details of the respective brokers against the invoices issued to him and their PAN details, confirmation letter discharge its burden of payment being genuine. The onus was thereafter upon the revenue to corroborate the same by calling upon the respective brokers, their Income Tax returns, MoA, AoA of companies and verifying the veracity of the alleged transaction payment of 45Lac. 3. The learned assessing officer and DRP-2 while disallowing the brokerage expense of Rs. 45 Lakh by insisting upon agreements between brokers and assessee erred in appreciating the fact that there is trade practice in the market for such kind of transaction in real estate of commission agents to act upon oral instructions to look for prospective buyers as no party wants to remain bound or committed to one commission agent. Moreover, as a matter of practice, the property dealers do not sign formal Contract documents and the brokerage paid i.e. 3% in present case was within the accepted trade practice of property dealer charging 4% of sale consideration. The immovable property being high ticket priced property was sold through the assistance of stated brokers SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1766 (Del-Trib)

IN THE ITAT DELHI BENCH

G.S. PANNU, V.P. & ASTHA CHANDRA, J.M.

Sunil Kapoor v. ACIT

ITA No. 3314/Del/2023

8 April, 2024

Assessee by: Rajiv Tyagi, Advocate

Department by: Vizay B. Vasanta, CIT-DR

ORDER

Astha Chandra, J.M.

The appeal filed by the assessee is directed against the final assessment order of Learned Asstt. Commissioner of Income Tax, Circle Int. Tax (2)(1)(2) New Delhi (AO) dated 25-9-2023 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 (the Act) pursuant to the directions of Learned Dispute Resolution Panel (DRP) pertaining to the assessment year (assessment year) 2021-22.

2. The assessee has raised the following grounds of appeal:-

1. The learned assessing officer and DRP-2 while disallowing the Brokerage expense of Rs. 45 Lakh failed to appreciate that the Brokerage Commission paid by the Appellant to the 3 Brokers was duly supported by the Tax invoices issued by the 3 Brokers which contained their full addresses amongst other details. During the course of the Assessment proceedings the 3 Brokers had again issued Confirmation Letters with regard to the Brokerage paid to them by the Appellant. The Appellant had placed on record the PAN details of the 3 Brokers. Thus all the primary facts relating to the payment of the Brokerage Commission paid by the Appellant to the 3 Brokers, had been brought on the record of the Assessing Authority by the Brokerage Commission paid by the Appellant to the 3 Brokers in the relevant financial year 2020 and the corresponding payment were made through cheques by Appellant. Thus both the source of payment as well as payment documented.

2. The learned assessing officer and DRP-2 while disallowing the brokerage expense of Rs. 45 Lakh erred in appreciating the fact that Appellant providing the by the payment details of the respective brokers against the invoices issued to him and their PAN details, confirmation letter discharge its burden of payment being genuine. The onus was thereafter upon the revenue to corroborate the same by calling upon the respective brokers, their Income Tax returns, MoA, AoA of companies and verifying the veracity of the alleged transaction payment of 45Lac.

3. The learned assessing officer and DRP-2 while disallowing the brokerage expense of Rs. 45 Lakh by insisting upon agreements between brokers and assessee erred in appreciating the fact that there is trade practice in the market for such kind of transaction in real estate of commission agents to act upon oral instructions to look for prospective buyers as no party wants to remain bound or committed to one commission agent. Moreover, as a matter of practice, the property dealers do not sign formal Contract documents and the brokerage paid i.e. 3% in present case was within the accepted trade practice of property dealer charging 4% of sale consideration. The immovable property being high ticket priced property was sold through the assistance of stated brokers