A.B. NIRVAN BUILDERS (P) LTD.,KOLKATA vs. A.D.I.T., RANGE - 7,, KOLKATA

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ITA 666/KOL/2025Status: DisposedITAT Kolkata29 June 2026AY 2012-20136 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided all necessary details, including PAN, addresses, and TDS deduction, for the commission payments. Following the jurisdictional High Court's decision, the Tribunal found that disallowance could not be made when TDS was deducted and deposited, and the payments were supported by books of accounts.

What were the facts?

The assessee, a construction company, debited brokerage and commission expenses of ₹65,19,492/- for facilitating flat sales. The Assessing Officer (AO) disallowed this amount, treating it as bogus, and the CIT(A) upheld the disallowance. The AO and CIT(A) questioned the genuineness of services rendered by the commission agents.

What were the issues?

Whether the disallowance of brokerage and commission expenses is justified when the assessee has deducted TDS and provided details of the commission agents.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Somnath Ghosh, AR
For Respondent: Shri Pradeep Dung Dung, DR
Hearing: 11.06.2026Pronounced: 29.06.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 20.01.2025 for the AY 2012-13.

2.

The only issue raised by the assessee in the grounds of appeal is against the confirmation of disallowance of ₹65,19,492/- by the ld. CIT (A) as made by the AO under section 37(1) of the Act in respect of brokerage and commission.

4.

In the appellate proceedings, the Learned CIT (A) affirmed the order of the Learned AO. The Learned CIT (A) while dismissing the appeal noted that majority of the parties belonged to the family and having same address and the commission was paid at the flat rate of 2.5 %. Thus, the ld. CIT (A) upheld the order of the Learned AO on this issue.

5.

We have heard the rival contentions and perused the materials available on record. We find that the assessee undisputedly was engaged in the business of construction and sale of flats. We note that during the year the assessee paid commission of ₹65,19,492/- to various parties, which are extracted by the ld. CIT (A) at page number 17-20 in the appellate order giving the names, addresses, PAN numbers and amount paids. We note that it is customary in real estate business to do the sales through brokers and agents. We have examined the evidences filed before us and find that the assesseehas paid the commission and brokerage to the brokers with reference to the specific flats sold. The assessee filed all the details before the Learned AO as well as before the Learned CIT (A) comprising; PAN numbers, names, addresses and rate of commission, amount paid, TDS deducted and deposited into the government treasury.However, the Learned AO noted that the assessee could not provide any evidences of services having been provided by these brokers and added the same to the income of the assessee. Similarly, the Learned CIT (A) upheld the

“The views expressed by the Assessing Officer are erroneous in law. The Assessing Officer has overlooked the importance of the books of accounts maintained in the ordinary course of business. Reference in this regard may be made to sub-section (2) of Section 32 of the Indian Evidence Act, 1872. The books of accounts maintained in the ordinary course of business are relevant and they cannot be discarded in the absence of appropriate reasons. The mere fact that recipient did not reply in some cases or they were not found at the address furnished by the assessee does not in the least prove the fact that they were non-existent or that the payments shown to have been made by the assessee were imaginary. With the advancement of technology, it has become possible to sell goods throughout the country

7.

In the result, the appeal of the assessee is allowed.

Order pronounced on 29.06.2026.

Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 29.06.2026 Sudip Sarkar, Sr.PS

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Asst. Registrar Income Tax Appellate Tribunal, Kolkata

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