ITAT “D” BENCH, MUMBAI
BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARORA, AM
I.T.A. No. 1455 TO 1459/MUM/2010 -Assessment Years: 2001-02 TO 2005-06)
Smt. Renu Sudesh Kapoor
Date of Hearing: 21/05/2013
Date of Pronouncement: 21/05/2013
PER I.P.BANSAL, J.M:
All these appeals are filed by the assessee. They are directed against five separate orders passed by Ld. CIT(A)-39, Mumbai dated 2 1/12/2009 in respect of assessment years 2001-02 to 2005-06. All the impugned assessments have been framed under section 153A(1) r.w.s. 143(3) of the Income Tax Act, 1961 (the Act). The grounds of appeal in all the years are identical and read as under:
“1. On the facts and circumstances of the case and in Law the 1d. Commissioner of Income Tax (A) erred in confirming the additions made by the Assessing Officer holding that the claim of sub-brokerage paid by the appellant is not supported by any evidence.
2. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (A) failed to appreciate the fact that it is a common practice in the broking business to take the help of sub-brokers to whom the amount of sub-brokerage are paid.
3.On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (A) erred in rejecting the contention of the appellant that the completed assessment should not be disturbed unless there is an independent evidence unearthing the undisclosed income found in the search.”
2. The only identical issue involved in these appeals is disallowance of sub-brokerage paid by the assessee. The amount involved in each of the year is as under:
|2001-02||Rs. 1,05,000/- (Wrongly added by AO at Rs.1,50,00/- and mistake has been corrected by Ld. CIT(A) and disallowance is only Rs. 1,05,000/-|
3. The residence and office premises of the husband of the assessee namely, Shri. Sudesh Kapoor was searched on 6/11/2006, with regard to which impugned assessments have been framed under the provisions of section 1 53A. It is a matter of fact that no incriminating material was found during the course of search pertaining to sub-brokerage stated to be paid by the assessee. The assessee is stated to be engaged in the business of brokerage with regard to real estate from where the income has been earned by the assessee. For example a net commission of Rs. 6,26,250/- has been earned by the assessee in respect of assessment year 2001-02, which is after making payment of sub-brokerage of Rs.1,35,000/-. The total commission as per letter dated 2/3/2009 filed before Ld. CIT(A) is a sum of Rs.7,61,250/-. A copy of such reply is filed at page 4 to 8 of the paper book. The assessee has also given details with regard to commission earned by her in respect of the properties and such details for A.Y 2001-02 is filed at page -8 of the paper book and date of payments made to the various persons is also described and the said chart is reproduced below:
|S.No./ Date||Name of the
purchaser / seller
|Name of the building, with full postal address||Total area what rate it is sold / purchased||Consideration receipt/ brokerage
|19/8/ 00||Puneet Gupta
|Lease Flat-Maker Tower 19th Floor, Flat No.2,
|Lease rent- 1,05,000 (Area 1700 built up)||One month rent 1,05,000/- vide chq No.908 194 Bank of Baroda|
|10.1.01||Seller – Maker
|Maker Tower F, 21st Floor, Cuffe
|Area 5500 12,50,00,000/- (Lumpsum)||Part payment 6,56,250/- LessTDS vide chq No.00856 1 Bank of Baroda|
|Less PaidCommission to
|A) Cash Payments|
|22.8.00||Paid to Raman
|12.1.01||Paid to Ashok
|15.2.01||Paid to Arjun
|22.2.01||Paid to Arjun
|10.3.01||Paid to Rajan
|10.3.01||Paid to Arun
|12.3.01||Paid to Arun
3.1 Similar details are filed with respect to other years also and for the sake of brevity the details in its entirety are not reproduced and details regarding gross commission earned by the assessee and sub-brokerage paid out of that are described year wise as follows:
|Assessment Year||Gross Commissionearned by the
|Sub-brokerage (Rs.)||Net amount. (Rs.)|
3.2 It may also be mentioned here that the entire brokerage received by the assessee was through cheques and during the assessment year 2003-04 the payment of sub-brokerage amounting to Rs.44,000/- has been made by cheque. For A.Y 2004-05 the entire payment of sub-brokerage of Rs.30,000/- is made through cheque and similar is the position with respect to sub-brokerage paid of Rs.24,000/- in respect of A.Y 2005-06. All other sub-brokerage payments are made through cash. The disallowance has been made by the AO for the reason that the assessee failed to submit the evidence and addresses of the parties to whom the sub-brokerage was paid. Ld. CIT(A) has sustained the disallowances for the same reasons.
4. It is the case of the assessee that even during the course of search proceedings no evidence was found according to which it could be said that assessee did not pay sub-brokerage. As the matter was old assessee was not able to give details regarding the persons to whom sub-brokerage have been paid. As per common practice in the real estate brokerage small portion of the brokerage is to be paid to the person who has given information about the availability of the premises. Sub-brokerage paid by the assessee in all the cases is less than 20% of the amount earned by the assessee. Therefore, disallowance should not be sustained.
7. In the result, all these appeals are allowed in the manner aforesaid.
Order pronounced in the open court on 21/05/2013