Commonwealth Developers Pvt. Ltd, Fatorda V. ACIT, Special Range, Panaji

ITA 49/PAN/2022

AI Insights

The case involves Commonwealth Developers Pvt. Ltd., which appealed against the order of the CIT(A) confirming the disallowance of Rs.43,48,000 towards brokerage paid on the sale of flats for the assessment year 2017-18. The Assessing Officer had initially disallowed the brokerage claiming insufficient justification for the payments. However, the Tribunal noted that the brokerage rates were consistent with those in previous years, where similar payments had been allowed without disallowance. The Tribunal concluded that the assessee had adequately justified the brokerage payments by providing detailed information about the recipients of the brokerage.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136948 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 25-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.S. SHIVSHANKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI (AT e-Court, PUNE) BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.49/PAN/2022 नधा रण वष / Assessment Year : 2017-18 Commonwealth Developers Pvt. Ltd., CD Fountain head, Murida Post, Fatorda, Salcete, Goa – 403 602 PAN : AABCD1337M Vs. ACIT, Special Range, Panaji Appellant Respondent आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee arises out of the order dated 21-04-2022 passed by the CIT(A) in National Faceless Appeal Centre (NFAC), Delhi in relation to the assessment year 2017-18. 2. The only issue raised in this appeal is against the confirmation of disallowance of Rs.43,48,000/- towards brokerage paid by the assessee on sale of flats. 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of real estate development. It claimed deduction towards brokerage of Rs.43,48,000/-. On being called Assessee by Shri Pramod Vaidhya Revenue by Shri P.S. Shivshankar Date of hearing 13-09-2023 Date of pronouncement 14-09-2023 ITA No.49/PAN/2022 Commonwealth Developers Pvt. Ltd. 2 upon to furnish the necessary details in support of the brokerage, the assessee submitted party-wise detail of 23 persons to whom such brokerage was paid. The Assessing Officer (AO) made the disallowance of the entire brokerage on the ground that the assessee failed to furnish justification for the payment. The ld. CIT(A) affirmed the addition, against which the assessee has approached the Tribunal. 4. After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee furnished necessary details of the persons to whom brokerage was paid totalling to Rs.43.48 lakh on sales of Rs.37,38,38,261/-, which comes to 1.16%. A chart has been placed on record showing the position of brokerage paid in earlier years. For the immediately preceding year, the assessee paid brokerage of Rs.27,90,000/- on turnover of Rs.11,25,00,000/-, which comes to 2.48%. The case for the immediately preceding A.Y. 2016-17 was taken up for scrutiny u/s.143(3) and the AO did not make any disallowance on this score. A year prior, namely, A.Y. 2015-16, the assessee paid brokerage at the rate of 2.99% of the total sales, which was also allowed by the AO in the assessment u/s.143(3). For the A.Y. 2014-15, the assessee paid brokerage at 1.52%, which was also allowed by the AO u/s.143(3) of the Act. It, therefore, transpires that for all the ITA No.49/PAN/2022 Commonwealth Developers Pvt. Ltd. 3 earlier years, the assessee paid brokerage in the same manner as it paid for the year under consideration. Assessments for all the immediately preceding three years were taken up for scrutiny u/s.143(3) and deduction of brokerage was allowed. In the year under consideration, the assessee paid brokerage at 1.16% as against the immediately preceding assessment year at 2.48% and 2.99% a year prior. Thus, the brokerage paid during the year under consideration is quite reasonable vis-a-vis the earlier years. In our considered opinion, once the brokerage has been allowed in all the earlier years and the assessee furnished the details of the persons to whom the brokerage was paid, there was no reason on the part of the AO to disallow it on the ground that no justification was given for payment. We, therefore, overturn the impugned order and direct to delete the addition. 5. In the result, the appeal is allowed. Order pronounced in the Open Court on 14 th September, 2023. Sd/- Sd/- ( S.S.VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 14 th September, 2023 सतीश ITA No.49/PAN/2022 Commonwealth Developers Pvt. Ltd. 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The respondent 3. The Pr.CIT concerned 4. DR, ITAT, Panaji Bench, Panaji 5. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 13-09-2023 Sr.PS 2. Draft placed before author 14-09-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *