The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted that addition of Rs.1.58 Crores paid as sub-brokerage or Commission.
The assessee, M/s. Realistic Realitors Pvt. Ltd. filed the return declaring income of Rs.2,58,31,030 which was processed under section 143(1) of the Income Tax Act, 1961.
The case was reopened under section 148 of the Income Tax Act, 1961. The A.O. decided the objections of the assessee separately. The A.O. during the assessment proceedings noticed that assessee has paid and debited a sum of Rs.1,58,91,312 as payment on account of sub-brokerage fees to M/s. Taral Vincom Pvt. Ltd. The assessee was asked to give details of the commission paid to the sub-broker.
The assessee explained that the assessee company is engaged in the business of real estate and made payment of sub-brokerage to M/s. Taral Vincom Pvt. Ltd., through banking channel after deduction of TDS. The amount is paid against the sub-brokerage against the bill.
The AO while rejecting the contention of the assessee disallowed the impugned amount of Rs.1,58,91,312. However, the CIT(A) considering the issue in detail and documentary evidence on record, deleted the entire addition.
So the revenue department challenged the Order of the CIT(A) in deleting the addition of Rs.1,58,91,312/- paid to M/s. Taral Vincom Pvt. Ltd., as sub-brokerage/Commission under section 37.
The Coram of N.K.Billaiya and Bhavnesh Saini noted that assessee has been able to prove that the impugned amount has been incurred wholly and exclusively for the purpose of business of assessee. The AO did not bring any evidence on record to dispute the correctness of the documentary evidence filed by the assessee on record.
The ITAT observed that The documentary evidence on record clearly suggest that assessee entered into the genuine business activities with the sub-broker and sub- broker rendered services for the business activity of the assessee. In the Group Case the Ld. CIT(A) has already deleted the similar addition finding the commission payment made to the same sub-broker as genuine.
The Tribunalin the absence of any rebuttal from the side of the Revenue through any documentary evidence on record, did not find any justification to interfere with the Order of the CIT(A) in deleting the addition. Therefore, uphold his Order and dismiss the appeal of the Revenue.
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