DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR V. M/S ANUKAMPA BUILDHOME PVT. LTD., JAIPUR

ITA 521/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7826 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 15-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Capital asset; Business expenditure; Set aside; Bogus
• Section: 131; 37(1); 43; 13; 145(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 521/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2015-16 THE DCIT CENTRAL CIRCLE 1 JAIPUR CUKE VS. M/S. ANUKAMPA BUILDHOME PVT LTD. 401, ANUKAMPA MANSION, M.I. ROAD, JAIPUR 302 001 LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFCA 8145 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY: SHRI B.K. GUPTA , CIT DR FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL, CA LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/01/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 23 /01/2020 VKNS'K@ ORDER PER SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF CIT(A) -4,JAIPUR DATED 11.02.2019 FOR THE ASSES SMENT YEAR 2015-16 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE BY AO OF RS. 3,96,99,161/- BY REJECTING THE BOOKS AND TREATI NG THE RECEIPTS FROM CUSTOMERS AS AN INCOME. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) WAS RIGHT IN GRANTING RELIEF OF RS. 24,7 9,385/- OUT ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 2 OF TOTAL ADDITION OF RS. 25,79,385/- ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES IGNORING THE FA CT THAT THESE PERSONS COULD NOT FURNISH THE DETAILS OF THE FLATS OF PROJECT OF FLAT NUMBER OR PERSON TO WHOM THEY HAD A LLEGEDLY SOLD THE FLATS. THIS PROVES THAT THEY WERE PAID COM MISSION ONLY FOR CLAIMING BOGUS EXPENSES. 2.1 IN GROUND NO. 1, THE REVENUE IS AGGRIEVED THA T THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,96,99,161/- MADE BY THE AO. 2.2 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF REAL ESTATE. IT HAS E-FILED ITS RETURN OF INCOME FOR A.Y. 2015- 16 ON 26/09/2015 DECLARING A TOTAL INCOME AT RS. NI L/- (LOSS OF RS. 1,59,40,582/-). DURING THE YEAR UNDER CONSIDERATION , ASSESSEE BOOKED SALES OF TWO PROJECTS NAMELY HANGING GARDEN AT JAIS INGHPURA & GRANDEUR AT SWEJ FARM, SODALA, JAIPUR. OUT OF THEM, PROJECT HANGING GARDEN WAS COMPLETED LONG BACK IN PRECEDING YEARS BUT IN PROJE CT GRANDEUR CONSTRUCTION EXPENSES WERE ALSO INCURRED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE REGULARLY FOLLOWS THE P ROJECT COMPLETION METHOD OF ACCOUNTING, ACCORDING TO WHICH INCOME FR OM SALE IS RECOGNISED WHEN ENTIRE CONSIDERATION IS RECEIVED AN D POSSESSION/REGISTRY IS DONE. THE AO DURING THE COURSE OF ASSESSMENT PRO CEEDING OBSERVED THAT THE PROJECTS HANGING GARDEN & PROJECT GRANDEUR HAVE BEEN COMPLETED BUT IN THE BALANCE SHEET OF THE COMPANY, THE ADVANCES RELATING ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 3 TO PROJECT GRANDEUR AMOUNTING TO RS. 3,96,99,161/- ARE REFLECTED. THE AO, THEREAFTER, REFERRED TO ACCOUNTING STANDARD AND GUIDANCE NOTE ISSUED BY THE ICAI AND HELD THAT A REAL ESTATE DEVE LOPER IS REQUIRED TO FOLLOW PERCENTAGE COMPLETION METHOD. ACCORDINGLY, T HE ASSESSEE SHOULD HAVE RECOGNIZED THE REVENUE EQUIVALENT TO RS. 3,96, 99,161/- BEING ADVANCES RECEIVED FROM CUSTOMERS. THE AO, THEREAFTE R, REJECTED THE BOOKS OF ACCOUNTS U/S 145(3) AND COMPUTED THE INCOME BY A PPLYING PERCENTAGE COMPLETION METHOD AND CONSEQUENTLY ASSESSED THE ADV ANCES RELATING TO PROJECT GRANDEUR OF RS.3,96,99,161/- AS INCOME OF THE ASSESSEE AND MADE ADDITION FOR THE SAME. 2.3 IN FIRST APPEAL THE LD. CIT(A) AT PAGE 8 OF OR DER IN PARA 5.3 STATED THAT VARIOUS HIGH COURTS INCLUDING RAJASTHAN HIGH C OURT HAVE HELD THAT CHOICE OF FOLLOWING A PARTICULAR METHOD OF ACCOUNTI NG IS ON THE ASSESSEE . THE SAME CANT BE THRUST UPON BY THE DEPARTMENT. IN THE PRESENT CASE, ASSESSEE HAS BEEN REGULARLY FOLLOWING AN ACCOUNTING POLICY WHEREBY SALES WERE RECOGNIZED ON EXECUTION OF THE SALE DEED AND T HE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE PAST. THEREFORE, SUCH ACCOUNTING POLICY WHICH IS REGULARLY FOLLOWED CANT BE DISTURBED IN T HE YEAR UNDER CONSIDERATION. THERE IS NO PROVISION UNDER THE ACT WHICH MAKES PERCENTAGE COMPLETION METHOD OF ACCOUNTING IN REAL ESTATE PROJECT ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 4 MANDATORY AS OBSERVED BY THE AO. EVEN THE GUIDANCE NOTE ISSUED BY ICAI IS RECOMMENDATORY. THE SAME DO NOT OVERRIDE TH E CHOICE OF THE METHOD OF ACCOUNTING TO BE FOLLOWED BY THE ASSESSEE PROVIDED UNDER THE ACT. OUT OF THE TOTAL ADVANCE OF RS.3,96,99,161/- R ECEIVED FROM CUSTOMERS AS ON 31.03.2015, A SUM OF RS.2,39,28,441/- IS RECO GNIZED AS SALES IN THE FY 2015-16, RS.57,50,766/- IN FY 2016-17 & RS.89,50 ,348/- IN FY 2017-18 WHEN THE REGISTRY WAS EXECUTED ON RECEIPT O F THE BALANCE PAYMENT AND AMOUNT OF RS.10,67,029/- REFUNDED IN RE SPECT OF BOOKING BEING CANCELLED. THIS ALSO PROVES THAT THE ASSESSEE IS OFFERING THE INCOME ON PROJECT COMPLETION BASIS. THE LD. CIT(A) HAS TAK EN INTO CONSIDERATION THE CASE LAWS RELIED ON BY THE LD.AR OF THE ASSESS EE BEFORE HIM. THE LD. CIT(A) FURTHER NOTED THAT EVEN OTHERWISE, IT IS FOU ND THAT BY MAKING ADDITION OF RS. 3,96,99,161/- THE AO HAS TAXED THE ENTIRE RECEIPT ITSELF WHICH IS INCORRECT. IF THE DEDUCTION FOR COST IS AL LOWED, THERE DOES NOT REMAIN ANY INCOME AS ASSESSEE IS IN LOSS. ACCORDI NGLY, THE LD. CIT(A) DELETED THE ADDITION OF RS.3,96,99,161/- MADE BY T HE AO. 2.4 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO PRAYING THAT THE LD. CIT(A) HAS ERRED IN DELETIN G THE ADDITION OF RS. 3,96,99,161/- MADE BY THE AO. ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 5 2.5 ON THE OTHER HAND THE LD.AR HAS SUPPORTED THE O RDER OF THE LD. CIT(A). HOWEVER, TO THIS EFFECT, THE LD.AR OF THE A SSESSEE RELIED ON THE DECISION OF ITAT BANGALORE BENCH IN THE CASE OF S.K . PROPERTIES VS ITO (2017) 162 ITD 419. 2.6 WE HAVE HEARD THE LD. COUNSEL OF BOTH THE PARTI ES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE, THE A O MADE THE ADDITION OF RS. 3,96,99,161/- BY TREATING THE ENTIRE ADVANCE RE CEIVED FROM THE CUSTOMERS AS INCOME OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAS NOT FOLLOWED PERCENTAGE COMPLETION METHOD WHEREAS AS PE R THE GUIDANCE NOTE ISSUED BY ICAI THE ASSESSEE IS REQUIRED TO FOL LOW PERCENTAGE COMPLETION METHOD OF ACCOUNTING. IT IS NOTED FROM T HE AVAILABLE RECORDS THAT THE ASSESSEE IS REGULARLY FOLLOWING AN ACCOUNT ING POLICY WHEREBY SALES IS RECOGNIZED BY FOLLOWING PROJECT COMPLETION METHOD . ACCORDING TO THIS METHOD, THE SALES ARE RECOGNIZED WHEN THE S ALE DEED IS EXECUTED AND POSSESSION OF THE FLAT IS GIVEN TO THE BUYER. T HERE IS NO PROVISION UNDER THE ACT WHICH MAKES PERCENTAGE COMPLETION MET HOD OF ACCOUNTING IN REAL ESTATE PROJECT MANDATORY AS OBSERVED BY THE AO. THE GUIDANCE NOTE ISSUED BY THE ICAI IS RECOMMENDATORY. THE SAME DO NOT OVERRIDE THE CHOICE OF METHOD OF ACCOUNTING TO BE FOLLOWED B Y THE ASSESSEE PROVIDED UNDER THE ACT. THE LD.AR OF THE ASSESSEE R ELIED ON THE DECISION ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 6 OF ITAT BANGALORE BENCH IN THE CASDE OF S.K. PROPER TIES VS ITO (SUPRA) HOLDING AS UNDER:- APPELLANT FIRM HAD RECOGNIZED THE INCOME IN RESPE CT OF SALE OF PLOTS BY ADOPTING COMPLETED CONTRACT METHOD, WHE REAS THE ASSESSING OFFICER IS OF THE VIEW THAT INCOME SHOULD BE OFFERED TO TAX RECEIVED ON YEAR TO YEAR BASIS AT THE STAGE OF RECEIPT OF CONSIDERATION, IRRESPECTIVE OF THE FACT THAT THE TI TLE IN THE PLOTS HAVE BEEN PASSED ON THE BUYER OR NOT. IT IS AN UNDISPUTE D FACT THAT THE PLOTS FORMS A PART OF STOCK IN TRADE IN THE BUSINES S OF THE APPELLANT FIRM AND ARE IMMOVABLE PROPERTIES. THE TITLE IN THE IMMOVABLE PROPERTY CAN BE PASSED ON ONLY IN TERMS OF TRANSFER OF PROPERTIES ACT. PROVISIONS OF SECTION 2(47) OF THE ACT HAVE NO APPLICATION TO THE TRANSACTIONS OF STOCK-IN-TRADE. IN THIS CASE, T HE STOCK-IN-TRADE IS IMMOVABLE PROPERTY AND THE TITLE IN IMMOVABLE PROPE RTY CAN BE TRANSFERRED OR ALIENATED IN ACCORDANCE WITH THE PRO VISIONS OF THE TRANSFER OF PROPERTIES ACT. THE RIGHT, TITLE OR INT EREST IN THE IMMOVABLE PROPERTY CAN BE TRANSFERRED ONLY BY WAY O F REGISTERING THE CONVEYANCE DEED EXECUTED IN THIS BEHALF. EVEN T HE ACCOUNTING STANDARD 9 DEALING WITH THE RECOGNITION OF INCOME A LSO LAYS DOWN THAT THE INCOME IN RESPECT OF TRANSFER OF IMMOVABLE PROPERTY CAN BE RECOGNIZED ONLY WHEN THE RISKS, REWARDS AND OWNERSH IP OF THE PROPERTY IS TRANSFERRED TO THE BUYER . IT IS FURTHER NOTED THAT OUT OF THE TOTAL ADVANCE OF RS.3,96,99,161/- RECEIVED FROM CUSTOMERS AS ON 31-03-2015, A SUM OF RS. 2,39,28,441/- IS RECOGNISED AS SALES IN THE F.Y. 2015-16, RS. 57,50, 766/- IN F.Y 2016-17 & RS. 89,50,348/- IN F.Y 2017-18 WHEN THE REGISTRY WAS EXECUTED ON RECEIPT OF THE BALANCE PAYMENT AND AMOUNT OF RS. 10 ,67,029/- REFUNDED IN RESPECT OF BOOKING BEING CANCELLED. THE COMPLETE DE TAIL OF SUBSEQUENT RECOGNITION IS ALSO PLACED BY THE ASSESSEE AT PAGE PB 27 OF THE PAPER ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 7 BOOK. THEREFORE WHEN SUCH AMOUNT IS ALREADY RECOGNI SED AS REVENUE OR REFLECTED BACK IN THE SUBSEQUENT YEARS, ASSESSING T HE SAME IN THE YEAR UNDER CONSIDERATION HAS RESULTED INTO DOUBLE TAXATI ON. THE AO HAS NOT CONSIDERED THE EXPENDITURE INCURRED BY THE ASSESSEE AGAINST SUCH RECEIPT . IN THE PRESENT CASE IN THE PROJECT GRANDEUR, TOTAL VALUE OF STOCK AS ON 31- 03-2015 WAS RS. 6,10,28,779/-. THEREFORE, DEDUCTION ON ACCOUNT OF COST AGAINST THE RECEIPT OF RS.3,96,99,161/- OUGHT TO HA VE BEEN ALLOWED INSTEAD OF ASSESSING THE RECEIPT AS INCOME. HENCE, TAKING I NTO CONSIDERATION THE FACTS AND CIRCUMSTANCES, WE FIND NO REASON TO INTER FERE WITH THE ORDER OF THE LD. CIT(A). THUS GROUND NO. 1 OF THE REVENUE IS DISMISSED. 3.1 IN GROUND NO. 2, THE REVENUE IS AGGRIEVED THA T THE LD. CIT(A) HAS ERRED IN GRANTING RELIEF OF RS. 24,79,385/- OUT OF TOTAL ADDITION OF RS. 25,79,385/- ON ACCOUNT OF DISALLOWANCE OF COMMISSIO N EXPENSES IGNORING THE FACT THAT THESE PERSONS COULD NOT FURNISH THE D ETAILS OF THE FLATS OR PROJECT OF FLAT NUMBER OR PERSON TO WHOM THEY HAS A LLEGEDLY SOLD THE FLATS. THIS PROVES THAT THEY WERE PAID COMMISSION ONLY FOR CLAIMING BOGUS EXPENSES. 3.2 BRIEF FACTS OF THE CASE ARE THAT DURING THE YE AR ASSESSEE CLAIMED COMMISSION EXPENSES OF RS.80,79,385/- IN RESPECT OF FOLLOWING PROJECTS:- HANGING GARDEN- RS.39,04,385/- ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 8 GRANDEUR- RS.41,75,000/- RS.80,79, 385/- IN ASSESSMENT PROCEEDING, ASSESSEE FILED THE DETAIL S OF COMMISSION EXPENSES. AO ISSUED SUMMONS U/S 131 OF THE ACT TO S OME OF THESE PERSONS TO VERIFY THE CLAIM OF EXPENSES. AO AT PAGE 15 OF O RDER IN PARA 5.2 OBSERVED THAT STATEMENTS OF SOME OF THE PERSONS WER E RECORDED (AT PAGE 17 TO 30 OF ASSESSMENT ORDER) FROM WHICH IT IS FOUND T HAT THESE PERSONS ARE HAVING NO KNOWLEDGE REGARDING COMMISSION WORK DONE BY THEM. MOREOVER, THEY COULD NOT SUBMIT THE DETAILS OF THE FLATS OR PROJECT OR FLAT NOS. OR PERSONS TO WHOM THEY HAD ALLEGEDLY SOLD THE FLATS. THE AO FURTHER HELD THAT THE PERSONS ARE USED AS ENTRY PROVIDERS F OR THE PURPOSE OF CLAIMING COMMISSION EXPENSES BY THE ASSESSEE COMPAN Y. THE AO REQUIRED ASSESSEE TO PROVE SUCH EXPENSES CLAIMED VIDE NOTICE DATED 07.12.2017. THE ASSESSEE VIDE LETTER DATED 18.12.2017 SUBMITTED THE DOCUMENTS AND EVIDENCES TO PROVE THE GENUINENESS OF THE COMMISSIO N EXPENSES. HOWEVER AO REJECTED THE CONTENTION OF THE ASSESSEE AND ACCO RDINGLY, MADE DISALLOWANCE OF RS. 25,79,385/- IN RESPECT OF 12 PE RSONS OUT OF COMMISSION EXPENSES OF RS.39,04,385/- CLAIMED FOR 2 0 PERSONS IN RESPECT OF HANGING GARDEN PROJECT. ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 9 3.3 IN FIRST APPEAL, THE LD. CIT(A) HELD AT PAGE 13 OF THE ORDER AT PARA 8.3 THAT IN RESPECT OF ALL THESE 12 PERSONS, FOR WH ICH DISALLOWANCE IS MADE BY AO, ASSESSEE HAD FILED COMPLETE ADDRESS. THEY A RE ASSESSED TO TAX. TAX HAS BEEN DEDUCTED AT SOURCE. PAYMENT IS MADE BY ACC OUNT PAYEE CHEQUE. OUT OF SEVEN PERSONS PRODUCED BEFORE AO SIX HAVE AC CEPTED THE FACT OF RECEIPT OF COMMISSION. ACCORDINGLY, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE MADE BY AO TO ONE PERSON NAMELY SMT. T ARUNA JAIN AMOUNTING TO RS.1,00,000/- AND ALLOWED RELIEF OF RS .24,79,385/- IN RESPECT OF REMAINING 11 PERSONS. 3.4 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO AND PRAYED THAT THE LD. CIT(A) HAS ERRED IN GRAN TING THE RELIEF OF RS. 24,79,385/- OUT OF TOTAL ADDITION OF RS. 25,79,385/ - MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES. 3.5 `ON THE OTHER HAND, THE LD.AR OF THE ASSESSEE S UPPORTED THE ORDER OF THE LD. CIT(A) 3.6 WE HAVE HEARD THE LD. COUNSEL OF BOTH THE PARTI ES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS PER FACTS OF THE PRESENT CASE, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED COMM ISSION EXPENSES OF RS. 80,89,385/- IN RESPECT OF TWO PROJECTS. IN THIS RESPECT, THE ASSESSEE HAD ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 10 FILED CERTAIN DETAILS OF COMMISSION EXPENSES AND OU T OF DETAILS FURNISHED BY THE ASSESSEE, THE AO SUMMONED SOME PARTIES IN OR DER TO VERIFY THE CLAIM RAISED BY THE ASSESSEE WITH REGARD TO RENDERI NG OF SERVICES BY THOSE PERSONS. AFTER RECORDING THE STATEMENTS OF THOSE P ERSONS , THE AO DENIED SUCH EXPENSE ON THE GROUND THAT THOSE WHO WERE SUMM ONED BY HIM WERE HAVING NO KNOWLEDGE REGARDING THE COMMISSION WORK D ONE BY THEM AND THEY COULD NOT SUBMIT THE DETAILS OF FLATS OR PROJE CT OF FLAT NUMBER OF PERSONS TO WHOM THEY HAD ALLEGEDLY SOLD THE FLATS. ON THE CONTRARY, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO ONE PERSON WH O HAD DENIED THE RECEIPT OF COMMISSION OF RS. 1.00 LAC AND HAD ALLOW ED THE RELIEF TO OTHER PERSONS BY HOLDING THAT THOSE PERSONS WERE ASSESSED TO TAX. TAX HAS BEEN DEDUCTED AT SOURCE AND OUT OF 07 PERSONS WHOSE STAT EMENTS WERE RECORDED, 06 PERSONS ACCEPTED THE FACT OF RECEIPT OF COMMISSION. AFTER VERIFYING THE STATEMENTS RECORDED BY THE AO IN RESP ECT OF TOTAL COMMISSION PAYMENT MADE BY THE ASSESSEE OF RS. 25,7 9,385/-, WE FOUND THAT STATEMENTS OF THOSE PERSONS SUMMONED U/S 131 O F THE ACT WERE RECORDED ON OATH AND AS PER THEIR STATEMENTS IT IS FOUND THAT THESE PERSONS HAVE NO KNOWLEDGE AT ALL REGARDING THE COMMISSION W ORK DONE BY THEM. THEY COULD NOT FURNISH THE DETAILS OF FLATS OR PROJ ECTS OR FLAT NUMBER OR PERSONS TO WHOM THEY HAD ALLEGEDLY SOLD THE FLATS. ONE OF THEM EVEN ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 11 DENIED ANY RECEIPT OF COMMISSION FROM THE ASSESSEE COMPANY. IT WAS CONFIRMED FROM THE STATEMENTS OF 05 PERSONS NAMELY MENTIONED AS UNDER:- (A) PARIDHI JAIN (B) RITU JAIN (C) SWENA JAIN (D) JAGARTI JAIN (E) SHIVANI JAIN IT IS NOTED THAT THESE PERSONS EITHER RESIDE OUTSID E JAIPUR OR ARE HOUSEWIVES AND THEREFORE, THEY COULD NOT HAVE PERFO RMED ANY COMMISSION WORK DURING THE YEAR UNDER CONSIDERATION FOR THE ASSESSEE COMPANY. IT IS A SETTLED LAW THAT FOR CLAIMING THE COMMISSION EXPENSES, IT WAS THE ONUS UPON THE ASSESSEE TO PROVE BEFORE THE LOWER AUTHORITIES REGARDING RENDERING THE SERVICES. THE HON'BLE SUPRE ME COURT IN THE CASE OF UMAKANT B AGARWAL VS DCIT (2015) 57 TAXMANN. CO M 137 HAS HELD AS UNDER:- SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSIN ESS EXPENDITURE - ALLOWABILITY OF (COMMISSION) - ASSESSEE WAS ENGAGED IN TRADING OF CEMENT AND ITS RELATED PRODUCT AND WAS APPOINTED AS AGENT BY COMPANY 'G' TO PROCURE BUSINESS - ASSESSEE ENGAGED SUB-AGENTS P AND S ON C OMMISSION BASIS - HIGH COURT BY IMPUGNED ORDER HELD THAT SINCE ASSESSEE FA ILED TO PRODUCE EVIDENCE REGARDING NATURE OF SERVICES RENDERED BY SUB-AGENTS , SUB AGENCY COMMISSION ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 12 CLAIMED COULD NOT BE ALLOWED - WHETHER SPECIAL LEAV E PETITION FILED AGAINST IMPUGNED ORDER WAS TO BE DISMISSED - HELD, YES [IN FAVOUR OF REVENUE] THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SMT. MALTI DEVI VS CIT, JALANDHAR (PUNJAB) (2019) 110 TAXMANN. COM 413 (P&H) HAS HELD AS UNDER:- SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF (COMMISSION) - ASSESSMENT YEAR 2009 -10 - APPELLANT, ENGAGED IN SENDING STUDENTS IN FOREIGN COUNTRIES, C LAIMED EXPENDITURE PAID AS COMMISSION FOR REFERRING STUDENTS TO HER - DETAILS OF STUDENTS SENT ABROAD WAS WITHHELD ON GROUND THAT HARD DISC OF COMPUTER CRUSH ED - SUCH COMMISSION WAS PAID ON LAST DAY OF YEAR - NO ACCOUNT WAS PRODU CED TO SUBSTANTIATE AS TO HOW MUCH COMMISSION WAS PAID - ASSESSEE WAS ABLE TO PRODUCE ONLY 21 PERSONS OUT OF 43 WHO HAD RECEIVED COMMISSION - REC IPIENTS OF COMMISSION, WHO APPEARED IN PROCEEDINGS WERE NOT ABLE TO GIVE D ETAILS EVEN OF A SINGLE STUDENT WHOM THEY HAD REFERRED TO APPELLANT - COMMI SSION WAS PAID TO HUSBAND AND DAUGHTER OF ASSESSEE AND TO FAMILY MEMB ERS OF CERTAIN PERSONS WHO WERE NEITHER CONNECTED WITH EDUCATION NOR WERE ENGAGED IN SENDING STUDENTS ABROAD - STILL ASSESSING OFFICER DISALLOWE D ONLY 50 PER CENT OF EXPENSES PAID AS COMMISSION - WHETHER THERE WAS NO PERVERSITY IN DISALLOWANCE - HELD, YES [PARA 7] [IN FAVOUR OF REV ENUE] KEEPING IN VIEW THE FACTS OF THE PRESENT CASE AND A LSO THE JUDGMENT OF HON'BLE SUPREME COURT AND HON'BLE PUNJAB & HARYANA HIGH COURT CITED ABOVE, WE ARE OF THE VIEW THAT IT WAS THE ONUS UPON THE ASSESSEE TO PROVE BEFORE THE REVENUE AUTHORITIES AND TO FURNISH THE E VIDENCE WITH REGARD TO RENDERING OF SERVICES TO WHOM ALLEGED COMMISSION WA S PAID. SINCE THE ASSESSEE COULD NOT PROVE THE ACTUAL RENDERING OF SE RVICES, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO CLAIM COMMISSION EXPENS ES. THUS WHILE TAKING INTO CONSIDERATION THE ENTIRE FACTS AND CIRCUMSTANC ES OF THE CASE, WE ALLOW ITA NO. 521/JP/2019 DCIT , CENTRAL CIRCLE-1, JAIPUR VS M/S. ANUKAMPA BUI LDHOME PVT. LTD., JAIPUR 13 THE COMMISSION EXPENSES TO SHRI AKHIL BOOLIA ONLY A ND WITH REGARD TO COMMISSION EXPENSES PAID TO OTHER PERSONS ARE CONCE RNED, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND UPHOLD THE ORDER OF THE AO. THEREFORE, THE GROUND NO. 2 OF THE REVENUE IS PARTLY ALLOWED. 4.0 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 23/01/2020 . SD/- SD/- FOE FLAG ;KNO LANHI XKSLKBZ (VIKRAM SINGH YADAV) (SANDEEP GOSAIN) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23/01/2020. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT , CENTRAL CIRCLE-1, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-M/S. ANUKAMPA BUILDHOME PVT. LTD. JA IPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR . 5. XKMZ QKBZY@ GUARD FILE {ITA NO. 521/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR