The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has deleted the addition holding that the brokerage would not be treated as income unless it was actually received by the assessee.
The assessing officer on the search and seizure carried out in the Bajaj group where assessee -Harmeet Singh was associated had found some documents related to the sale of immovable property. Among them there were documents related to payment of commission to the assessee in respect of the property sale at Delhi. The assessee gave an explanation that the brokerage had not been received due to some problem with Bajaj finance, and promised to compute brokerage as income as soon as brokerage had received. He also said that it had been a business practice. But the assessing officer computed the brokerage @ 0.5% of total sale consideration and made an addition of Rs.575500/-.
M. Baranwal, who appeared for the department contented that the assessee had already admitted before the authorized officer that the Vikram Bajaj had already promised to give brokerage @ 0.5% of the total sale consideration. He also contended that the addition was valid.
The Bench of NK Billaiya (Accountant Member) and Kul Bharath (Judicial Member) held that the brokerage could not be treated as income as the evidence had not been produced on actual receival of the brokerage on the sale of the property. The bench further deleted the impugned addition.
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