GLOBUS REALCON PVT LTD,GURGAON vs. DCIT CIRCLE-10(1), NEW DELHI
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Income Tax Appellate Tribunal, DELHI ‘H’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the
CIT(A)-22, New Delhi dated 26.02.2019 pertaining to Assessment Year
2015-16.
The sum and substance of the grievance of the assessee is that
the CIT(A) erred in sustaining a disallowance of Rs. 32,13,686/- made
by the Assessing Officer while completing assessment u/s 143(3) of the
Act.
Briefly stated, the facts of the case are that the assessee is
engaged in the business of real estate. During the course of scrutiny
assessment proceedings, the Assessing Officer noticed that the
assessee has claimed large sales promotion expenses in its profit and
loss account. Therefore, the assessee was asked to produce the details
regarding large sales promotion expenses.
The assessee did not furnish complete details. Therefore, once
again, the assessee was asked to produce entire details with regard to
large sales promotion expenses. The assessee was also asked to give
details party-wise that per party how many flats were booked and how
much payment was made for booking flat with documentary evidences
and to justify the claim of such large sales promotion expenses
amounting to Rs. 1,03,94,138/-.
Specific details sought for related to the following parties:
S. Name of the Party Status Total Amount of transactions (in Rs.) Nature of Expense N 1. M/s Wonder Media Inc. Returned 5,48,610/- Advertising through Hoarding Flex, Leaflet Undelivered Canopy, etc. 2. M/s KP Ad Agency Returned 9,65,076/- Advertising through Hoarding Flex, Leaflet Undelivered Canopy, etc. 3. M/s The Transaction Returned 6,80,000/- Commission on Sale of Point Undelivered Flat Returned 10,20,000/ Commission on Sale of 4. M/s Mathur Associates Undelivered Flat the Property Junctions 1 32,13,686/-
As is evident from the above chart, letter issued u/s 133(6) of the
Act returned unserved. However, later on, confirmations were
received from M/s The Transaction Point and M/s Mathur Associates.
But the Assessing Officer found that M/s Mathur Associates has
confirmed Rs. 12,68,688/- instead of Rs. 10,20,000/- and The
Transaction Point confirmed Rs. 7,64,047/- instead of Rs. 6,80,000/-.
In respect of other payments, the Assessing Officer was of the
view that the assessee could not prove the genuineness of the parties
and, therefore, the same remained unverifiable and disallowed Rs.
32,13,686/-.
The assessee carried the matter before the ld. CIT(A) but without
any success.
Before us, the ld. counsel for the assessee drew our attention to
the ledger account received from M/s Mathur Associates and The
Transaction Point and pointed out that in addition to the commission
income, there is an element of Service Tax which has been added to
the commission income and which is cause for difference in the
amount confirmed by the parties and claimed by the assessee.
In respect of commission paid on flats booked, the ld. counsel for
the assessee drew our attention to the chart at page 35 of the Paper
Book and pointed out that commission paid has been explained in
respect of each and every flat booked through the commission agents.
In so far as expenditure relating to advertisement is concerned,
our attention was drawn to Exhibits at pages 64 and 65 of the Paper
Book wherein details of parties to whom advertisement expenses have
been paid has been mentioned alongwith the amount of TDS wherever
applicable.
It is the say of the ld. counsel for the assessee that vide reply
dated 08.12.2017, the assessee has very elaborately explained the
transaction alongwith supporting details which have been completely
ignored by the Assessing Officer while framing the assessment.
Per contra, the ld. DR strongly supported the findings of the
Assessing Officer.
We have given thoughtful consideration to the orders of the
authorities below and have carefully considered the documents
referred to hereinabove. We find force in the contention of the ld.
counsel for the assessee. Confirmation of accounts from M/s Mathur
Associates and The Transaction Point clearly show that in addition to
commission, there is an element of Service Tax mentioned in the
account and the allegation of the Assessing Officer that the amount
confirmed by the parties differ from the amount claimed by the
assessee does not hold any water in as much as the difference is
because of the Service Tax.
In so far as advertisement expenses are concerned, exhibits
clearly explain the transaction wherein complete details have been
furnished alongwith TDS details.
Once TDS element is reflected in Form No. 26AS, the Assessing
Officer cannot allege that the parties are not genuine. Moreover, full
details are available on record. Therefore, we do not find any reason
in sustaining the disallowance. Findings of the ld. CIT(A) are set aside
and the Assessing Officer is directed to delete the impugned
disallowance.
In the result, the appeal of the assessee in ITA No.
4523/DEL/2019 is allowed.
The order is pronounced in the open court on 30.11.2022.
Sd/- Sd/-
[KUL BHARAT] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 30th November, 2022.
VL/
