Commission / Brokerage not Actually Received by Assessee is not Taxable: ITAT [Read Order]

The Delhi bench of ITAT has ruled that, Business of commission and brokerage on real estate transaction not Actually Received by Assessee is not Taxable.

A search and seizure operation held at the premises of Assessee Company, based on that document Assessing Officer made additions in respect of documents relating to Vipul World by observing that brokerage on the cash component on total consideration was already received by the assessee.

Being aggrieved with the action of AO Assessee approached CIT (A) and the authority partly allowed the appeal of Assessee.

The bench comprising MS Suchitra kamble, judicial member and SH. Prashant Maharishi, accountant member heard the contention of Revenue that CIT (A) has not considered the seized documents especially when the assessee has raised bills of commission and had not included the same in its income.

The bench while hearing the part of Assessee recorded that the aforesaid documents however categorically state that money was receivable, payable or were only claims. No corroborative evidence is there to prove that the assessee had indeed received the money.

Tribunal also added that books of accounts also do not have any entries either in the case of the assessee or that of M/s Vipul which results not even a shred of evidence to show that the assessee has received the money or for that matter even that a debt had been created in the name of the assessee in the books of M/s Vipul.

Bench cited various cases which are identical to the present case and also observed that “It is pertinent to note here that the Assessing Officer has mentioned in the Assessment order about the submissions made by the assessee that the commission was not received by the assessee company on account of dispute with the said party. Since the commission income has not been settled and crystallized, the same has not accrued to the assessee company. The said contention of the assessee was not dealt with by the Assessing Officer. There was no finding given by the Assessing Officer that the amount was received by the assessee outside the books of account”.

Based on the above observation bench held that Commission/Brokerage not actually received by Assessee is not taxable and there is no need to interfere with the order of the CIT (A).