CA Sandeep Kanoi
ACIT Vs. Shri Damodar Dass Batra (ITAT Delhi)
Issue – The Ld. CIT (A) has erred in deleting the addition of Rs. 11,23,263/- made by the A.O. without considering the fact that these commission expenses are bogus and fictitious and could not be fully substantiated by the assessee.
Held by CIT (A)
Appellant has been serving as a Real Estate Broker who buys and sells properties of well-known Developers/Builders. An established fact in this trade is that commission/rebate/incentive, called by whatever name, is passed on to the early investors or the investors who buy the bulk of property and who make the ready cash advance. It is also an established fact that the real estate broker also passes on a part of such commission, called by whatever name, to their clients. Therefore, the commercial expediency of such payments is very much justified.
Held by ITAT
We have heard both the sides on the issue. We find that in the assessee’ s business, it is a common practice to provide rebate or commission or incentive to various persons with whom the assessee has brokered the deal, therefore, we find that commission has been paid for the business purpose of the assessee. In view of these facts, we find no merits in this ground of revenue’s appeal.
