Case Law Details
Renu Ratnakar Bhattacharya Vs CIT (Appeals) (ITAT Mumbai)
It is the case of the assessee that at the time of purchase of house property the assessee paid brokerage to the tune of Rs.2,50,000/- at the rate of 1% of the agreement cost of the new property to one Mr. Rajesh Mahendru. The assessee brought on record PAN of Mr. Rajesh Mahendru, bank statement of capital account, scheme showing the RTGS payment made to Mr. Rajesh Mahendru. Apparently, there is no dispute as to the identity and genuineness of the transaction as to making payment of brokerage by the assessee to Mr. Rajesh Mahendru which has been made through banking channel. Keeping these facts in mind the Ld. CIT(A) allowed an amount of Rs.1,25,000/- and confirmed the balance.
To my mind brokerage at the rate of less than 1% paid by the assessee to Mr. Rajesh Mahendru is strictly as per market practice. The Ld. CIT(A), though admitted that the assessee has paid Rs.2,50,000/- as brokerage to Mr. Rajesh Mahendru but on the basis of surmises, has allowed only 50% which is not sustainable in the eyes of law. So in these circumstances I am of the considered view that the assessee is entitled for deduction of expenses paid towards brokerage under section 54 of the Act to the tune of Rs.2,50,000/-. The AO is directed to allow the same.
The assessee claimed to have made payment of Rs.1,50,000/-to its architects in the form of receipt and the detail of the blueprint is available from page 6 to 9 of the paper book.
I am of the considered view that when the assessee has purchased a house and architect is required to make the house habitable to whom the payment was made through banking channel and the Revenue Authorities have not disputed the identity and genuineness of the transactions, the same cannot be disallowed on the basis of conjuncture and surmises. So I am of the considered view that amount of Rs.1,50,000/- paid by the assessee to the architect is an allowable deduction and as such the disallowance made by the AO and confirmed by the Ld. CIT(A) is ordered to be deleted.
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