Adarsh Gupta, New Delhi V. ACIT, New Delhi

ITA 1392/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0819 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1392/DEL./2015 (ASSESSMENT YEAR : 2011-12) SHRI ADARSH GUPTA, VS. ACIT, CIRCLE 24 (1), D 7/7063, VASNAT KUNJ, NEW DELHI. NEW DELHI 110 070. (PAN : AEUPG8697K) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. APARNA KARAN, CIT DR DATE OF HEARING : 06.09.2018 DATE OF ORDER : 14.09.2018 O R D E R PER KULDIP SINGH, ACCOUNTANT MEMBER : THE APPELLANT, SHRI ADARSH GUPTA (HEREINAFTER REFER RED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 06.01.2015 PASSED BY LD. CIT (APPEALS)- 11, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER AL IA THAT :- 1. THAT THE LEARNED CIT (A) ERRED IN LAW & FACTS B Y REJECTING OUR CONTENTION THAT RS.1,88,645 IS IN THE NATURE OF DISCOUNT RECEIVED (BEING BROKERAGE PASSED ON BY THE PROPERTY AGENT THROUGH WHOM THE BOOKING WAS DONE) O N PURCHASE OF MY OWN IMMOVABLE PROPERTY AND IS REDUCT ION IN THE COST OF PROPERTY AND NO INCOME. THIS ADDITION OF INCOME MAY BE PLEASE BE DELETED. 2. THAT THE LEARNED CIT (A) ERRED IN LAW AND FACTS IN NOT DELETING EXPENSES OF RS.45,500 FOR SALES TAX. ITA NO.1392/DEL./2015 2 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : DURING SCRUTINY PROCEEDIN GS, ASSESSING OFFICER NOTICED FROM THE PERUSAL OF 26AS STATEMENT THAT AN AMOUNT OF RS.1,88,645/- WAS GIVEN TO THE ASSESSEE BY THE BROK ER AS DISCOUNT AGAINST THE BOOKING OF FLAT FROM PIONEER PARK WHEREAS TDS W AS DEDUCTED BY M/S. TRUST BANQ REALITY PVT. LTD. UNDER SECTION 194 H OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE BY THE AO. AO FURTHER MADE ADDITION OF RS.45,500/- ON ACCOUNT OF SALES-TAX EXPENSES. 3. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS PARTLY ALLOWED THE APPEAL. FEELING AGGR IEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING TH E PRESENT APPEAL. 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEEDED TO DEC IDE THE PRESENT APPEAL WITH THE ASSISTANCE OF THE LD. CIT DR AS WEL L AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NO.1 6. UNDISPUTEDLY, ADDITION OF RS.1,88,645/- HAS BEEN MADE BY THE AO ON THE GROUND THAT THIS AMOUNT HAS NOT BEEN DISC LOSED BY THE ITA NO.1392/DEL./2015 3 ASSESSEE IN THE COMPUTATION OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. IT IS ALSO NOT IN DISPUTE THAT THE T DS OF RS.1,88,645/- WAS DEDUCTED BY M/S. TRUST BANQ REALITY PVT. LTD. U/S 1 94H OF THE ACT. IT IS ALSO NOT DISPUTED BY THE AO THAT M/S. TRUST BANQ RE ALITY PVT. LTD. WAS THE BROKER OF M/S. PIONEER URBAN LAND AND INFRASTRU CTURE LTD. FROM WHICH THE ASSESSEE HAS PURCHASED A FLAT. 7. IN THE BACKDROP OF THE AFORESAID FATS AND CIRCUM STANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT DURING ASS ESSMENT PROCEEDINGS WHEN THE ASSESSEE HAS DULY EXPLAINED THE FACT THAT THE AMOUNT OF RS.1,88,645/- HAS BEEN RECEIVED BY HIM AS A DISCOUN T AGAINST THE BOOKING OF FLAT FROM THE BROKER BY DEDUCTING THE TD S, THE SAID AMOUNT HAS TO BE REDUCED FROM THE COST OF ACQUISITION AND ADDITION THEREOF CANNOT BE MADE. 8. MOREOVER, LD. CIT (A) HAS ADMITTED THE TRANSACTI ON AS TO THE PURCHASE OF THE FLAT BY THE ASSESSEE TO M/S. TRUST BANQ REALITY PVT. LTD. (THE BROKER) WHO HAS PAID THE SAID AMOUNT TO THE AS SESSEE. IT IS NOT UNCOMMON THAT THE BROKERS IN ORDER TO ENHANCE THE S ALE OF THE DEVELOPER GETS BENEFIT AND THEN PASSES THE BENEFIT OF THE SAM E TO THE PURCHASER WHICH HAS TO BE TREATED AS DISCOUNT. 9. WHEN THE FACTUM OF RECEIVING THE AMOUNT OF RS.1, 88,645/- IS INEXTRICABLY LINKED WITH THE PURCHASE OF THE FLAT, THE SAID AMOUNT WOULD CERTAINLY ACCOUNTED TOWARDS THE COST OF ACQUISITION OF THE FLAT. IN OTHER WORDS, COST OF THE FLAT SHALL BE REDUCED BY RS.1,88 ,645/-. SO, WE ARE OF ITA NO.1392/DEL./2015 4 THE CONSIDERED VIEW THAT AO AS WELL AS CIT (A) HAVE ERRED IN MAKING ADDITION ON THIS AMOUNT WHICH IS ORDERED TO BE DELE TED. SO, GROUND NO.1 IS DETERMINED IN FAVOUR OF THE ASSESSEE. GROUND NO.2 10. AO HAVE MADE ADDITION OF RS.45,500/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF SALES-TAX EXPENSES. UNDISPUTEDLY, TH ESE EXPENSES HAVE BEEN BOOKED BY THE ASSESSEE THROUGH PROFIT & LOSS A CCOUNT AS ASSESSEE HAS SHORT-RECOVERED THE SALES-TAX FROM THE PARTIES. WHEN THE NATURE OF THE EXPENSES ITSELF IS PENAL IN NATURE ON ACCOUNT O F SHORT-RECOVERY ON THE PART OF THE ASSESSEE, THE SAME ARE NOT ADMISSIBLE E XPENSES. SO, THE LD. CIT (A) HAS RIGHTLY UPHELD THE ADDITION MADE BY THE AO ON THIS ACCOUNT. HENCE, GROUND NO.2 IS DETERMINED AGAINST THE ASSESS EE. 11. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF SEPTEMBER, 2018. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 14 TH DAY OF SEPTEMBER, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-11, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.