Case Law Details
Gyan Chand Agarwal Vs Addl. CIT (ITAT Jaipur)
The issue in this ground is whether the sale consideration of the land belonging to Shri Sultan Meena can be taxed in the hands of the assessee, who is admittedly Power of Attorney holder of Shri Sultan Meena. There is no dispute with regard to the fact that, Shri Sultan Meena is recorded owner in the land in question. There is also no dispute with regard to the fact that, there is no evidence on record suggesting that the Power of Attorney to Shri Sultan Meena was executed by the assessee by paying consideration of the land. The Authorities below doubted about the transaction on the basis that the assessee failed to produce Shri Sultan Meena to prove that the sale consideration so received was handed over to the said Shri Sultan Meena and also in the absence of any receipt by the owner of the land, stating that the assessee acted merely an agent. Admittedly, the revenue has not brought out any material suggesting that the assessee received this consideration as the owner of the land. As per the sale deed enclosed at page 46 of the Paper Book, it is stated that the owner of the land wished to sale the land for personal and family needs. It is recorded in the sale deed that the attorney holder received a sum of Rs. 269,37,000 as a Power of Attorney of the owner of the land. This fact is remained undisputed.
Present case even if it is assumed that the assessee has received money and not handed over the same to the land owner such receipt is a liability not an income so far the assessee is concerned. Since, the Revenue has not brought any material on record suggesting that this power of attorney was executed in lieu of a consideration. In the absence of such material, purely, on the basis of presumption and suspicion tax liability cannot be fastened on such receipt on the assessee.
Brokerage and commission income earned by assessee engaged in the field of real estate was to be taxed as business income and not as income from other sources.
Assessee has given details of the persons from whom he received Brokerage including one Shri Sultan Meena in respect of whom the assessee had acted as power of attorney holder. The facts are identical as were in the earlier years; the assessee has placed copy of the Assessment Order pertaining to the assessment year 2008-09 and 2009-10 in the Paper Book Page No. 68 to 72, both the years, the assessee has shown income from Brokerage. In both the years the income of the assessee in respect of brokerage is accepted by the Department, we find that assessing officer has not made any inquiry from the persons from whom the assessee had received brokerage/commission. Under these facts, the assessing officer was not justified in rejecting the claim of the assessee of earning brokerage/commission. Therefore, we direct the assessing officer to treat the same as business receipt of the assessee and allow the expenditure made thereon. Hence, we deleted the addition made by the assessing officer by treating the brokerage receipts as income from other sources and disallowing the expenditure incurred thereon. Hence, the net profit declared at Rs. 5,77,816.65 be treated as net profit from business of brokerage.
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