Deputy Commissioner of Income-tax, V. M/s. Chamber Properties Pvt. Ltd.,handrai Constructions, Mumbai

ITA 2201/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93727 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 20-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RA J IV HARIT
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 2201 /PN/201 3 ASSESSMENT YEAR : 20 05 - 06 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE VS. M/S. CHAMBER PROPERTIES PVT. LTD., ESPLANADED SCHOOL BLDG., 1 ST FLR. FORT, MUMBAI-01 (APPELLANT) (RESPONDENT) PAN NO. AAACC5318E REVENUE BY: SHRI RAJIV HARIT ASSESSEE BY: SHRI DHARMESH SHAH DATE OF HEARING : 07-05-2015 DATE OF PRONOUNCEMENT : 13-05-2015 ORDER PER VIKAS AWASTHY, JM:- THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-CENTRAL, PUNE DATED 0 6-09-2013 FOR THE ASSESSMENT YEAR 2005-06. THE REVENUE HAS ASS AILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDIT ION OF RS.15,33,644/- ON ACCOUNT OF DISALLOWANCE OF COMMISSION AND BROKERAGE. 2. THE BRIEF FACTS OF THE CASE ARE: THE ASSESSEE IS A BUILDER AND DEVELOPER. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 07-10-2005 DECLARING INCOME OF RS.2,39,99 0/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTIC E U/S. 143(2) WAS 2 ITA NO. 2201/PN/2013, A.Y. 2005-06 ISSUED TO THE ASSESSEE. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED PAYMENT OF BROKERAGE AND COMMISSION RS.15,33,644/- UNDER THE HEAD ADMINISTRATIVE EXPENSES. THE DETAILS OF THE PAYMENT OF BRO KERAGE AND COMMISSION WERE CALLED FOR. ON THE BASIS OF INFORMATION FURNIS HED BY THE ASSESSEE, THE ASSESSING OFFICER MADE PRELIMINARY ENQUIRIE S FROM THE PERSONS WHO HAD PURCHASED FLATS. ACCORDING TO THE ASS ESSEE THE BROKERAGE WAS PAID TO M/S. MEHTAS REAL ESTATE CONSULTA NT AND M/S. PANCHSHEEL REALTY (UNIT OF PREMSAGAR HOTELS PVT. LTD.), A SIS TER CONCERN OF ASSESSEE COMPANY. ON ENQUIRY THE ASSESSING OFFICER FOUN D THAT THE PERSONS TO WHOM FLATS WERE ALLEGEDLY SOLD THROUGH BROKE R DENIED THE PAYMENT OF ANY BROKERAGE/COMMISSION. THEY CATEGORICALLY STATED THAT THEY HAD PURCHASED FLATS DIRECTLY FROM BUILDER AND THERE WAS NO INVOLVEMENT OF ANY BROKER. THE ASSESSING OFFICER ACCORDINGL Y, DISALLOWED THE EXPENDITURE TOWARDS PAYMENT OF BROKERAGE AND COMMISSION. AGGRIEVED BY THE ASSESSMENT ORDER DATED 31-12-2007, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REVERSED THE FIN DINGS OF THE ASSESSING OFFICER AND ALLOWED THE ENTIRE CLAIM OF ASSESSEE WIT H RESPECT TO PAYMENT OF BROKERAGE AND COMMISSION. NOW, THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL A SSAILING THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. 3. SHRI RAJIV HARIT REPRESENTING THE DEPARTMENT SUBMITT ED THAT THE ASSESSING OFFICER SUMMONED THE PERSONS WHO HAD PURCHASE D FLATS FROM THE ASSESSEE COMPANY. THE PURCHASERS OF THE FLATS DENIE D THE PAYMENT OF ANY BROKERAGE COMMISSION OR THE INVOLVEMENT OF ANY BRO KER IN THE PURCHASE OF PROPERTY. THE LD. DR REFERRED TO PAGE 14 O F THE PAPER BOOK 3 ITA NO. 2201/PN/2013, A.Y. 2005-06 FILED BY THE ASSESSEE. ON PAGE 14 THE ASSESSEE HAS PLAC ED ON RECORD THE INVOICE RAISED BY M/S. MEHTAS REAL ESTATE CONSULTANTS WH O WAS PURPORTEDLY INSTRUMENTAL IN SELLING FLAT NO. D-202 AND WAS PAID BROKERAGE OF RS.92,360/-. THE LD. DR POINTED OUT THAT EX CEPT FOR THE NAME, THE INVOICE DOES NOT BEAR SL. NO., ADDRESS/DETAILS OF T HE BROKER. HE FURTHER CONTENDED THAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY AGREEMENT FOR ENGAGING THE SERVICES OF THE BROKERS/COMM ISSION AGENTS. NO DETAILS OF SERVICES PROVIDED BY THE BROKERS ARE GIVEN. A BILL RAISED BY M/S. PANCHSHIL REALTY THAT IS AT PAGE 13 OF THE PAPER BOO K HAS DISCREPANCIES. THE BILL AMOUNT AND THE PAYMENTS MADE TO THE BROKER ARE AT VARIANCE. THE LD. DR VEHEMENTLY DEFENDED THE AS SESSMENT ORDER AND PRAYED FOR SET ASIDE THE FINDINGS OF THE COMMISSIONER O F INCOME TAX (APPEALS) ON THIS ISSUE. 4. AU CONTRAIRE SHRI DHARMESH SHAH APPEARING ON BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. AR SUBMITTED THAT THE ASSESSMENT ORDE R WAS PASSED HURRIEDLY AT THE FAG END OF TIME BARRING ASSESSMENT. SU FFICIENT OPPORTUNITY WAS NOT AFFORDED TO THE ASSESSEE TO PROPER LY PRESENT ITS CASE. IN SHORT PERIOD, THE ASSESSEE PRODUCED THE EVIDENCE WH ATEVER AVAILABLE ON 26-12-2007. THE ASSESSMENT ORDER WAS PASSED ON 3 1-12-2007. THE ASSESSEE HAD DISCHARGED ITS ONUS BY GIVING THE DETAILS O F THE PERSONS TO WHOM BROKERAGE/COMMISSION WAS PAID. THE ASSESSING OFFICE R DID NOT VERIFY FROM THE BROKERS WHO HAD RECEIVED THE COMMISSION. ONE OF THE BROKERS M/S. PANCHSHIL REALTY CONFIRMED THE RECEIPT OF BROK ERAGE COMMISSION. THE CONFIRMATION GIVEN BY M/S. PANCHSHIL REALTY IS PLACED AT PAGE 18 OF THE PAPER BOOK. THE LD. AR VEHEMENTLY S UPPORTED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF THE REVENUE. 4 ITA NO. 2201/PN/2013, A.Y. 2005-06 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESS MENT PROCEEDINGS WERE TAKEN UP IN THE THIRD WEEK OF DECEMBER, 2007. THE ASSESSEE SUBMITTED DETAILS OF THE BROKERAGE/COMMISSION PAID ON 26-1 2-2007. THEREAFTER, SHOW CAUSE NOTICE WAS SERVED ON THE ASSESS EE ON 28-12- 2007. ON 31-12-2007 THE ASSESSMENT ORDER WAS PASSED . THE ASSESSING OFFICER GAVE EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE ON THR EE DAYS ONLY I.E. 19-12-2007, 21-12-2007 AND 24-12-2007. THE AS SESSEE FURNISHED CERTAIN DOCUMENTS BEFORE THE COMMISSIONER OF INC OME TAX (APPEALS) DURING FIRST APPEAL. REMAND REPORT WAS SOUGHT FR OM THE ASSESSING OFFICER. THE ASSESSING OFFICER IN REMAND REPORT HA S STATED THAT TWO FLAT OWNERS OUT OF SIX WHO HAVE PURCHASED THE FLAT FROM ASSE SSEE HAVE DENIED PAYMENT OF BROKERAGE OR INVOLVEMENT OF ANY BROKER/COMMISSION AGENT. HOWEVER, THE ASSESSING OFFICER IS S ILENT ABOUT OTHER FOUR PURCHASERS. THE COMMISSIONER OF INCOME TAX (A PPEALS) WHILE GRANTING RELIEF TO THE ASSESSEE HAS NOT ASCERTAINED THE VERACITY OF THE INVOICE PRODUCED BY THE ASSESSEE AND HAS FAILED TO CONSID ER THE FACT THAT SOME OF THE PURCHASERS OF FLATS HAVE DENIED THE INVOLVEMENT OF BROKERS . 6. IT IS A WELL SETTLED PRINCIPLE OF NATURAL JUSTICE THAT NO ONE SHOULD BE CONDEMNED UNHEARD. ADEQUATE OPPORTUNITY OF HEARING SHO ULD BE GRANTED TO THE PARTIES TO THE LIS. IN THE PRESENT CAS E, IT IS EVIDENT THAT ASSESSMENT WAS MADE IN A RUSH. THE PRINCIPLES OF NATURA L JUSTICE WERE BREACHED. WE, ACCORDINGLY, REMIT THE FILE BACK TO THE ASSE SSING OFFICER FOR DECIDING OF THIS ISSUE AFRESH. THE ASSESSING OFFICER SHALL CONSIDER THE DOCUMENTS FURNISHED BY THE ASSESSEE BEFORE THE APPELLATE AUTHORITIES. THE ASSESSING OFFICER SHALL GRANT SUFFICIENT OPPORTUNITY TO THE ASSESS EE TO PRESENT ITS CASE. AFTER VERIFYING THE GENUINENESS OF THE DOCUMENTS FILED 5 ITA NO. 2201/PN/2013, A.Y. 2005-06 BY THE ASSESSEE AND THE VERACITY OF PAYMENT OF COMMISSIO N/BROKERAGE, THE ASSESSING OFFICER SHALL DECIDE THE ISSUE DE NOVO. 7. THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) O N THIS ISSUE ARE SET ASIDE AND THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 13 TH DAY OF MAY, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 13 TH MAY, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - CENTRAL, PUNE 4 THE CIT - CENTRAL, PUNE 5 6 THE DR, ITAT, B BENCH, P UNE. GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, PUNE