COMMISSIONER OF INCOME TAX- IV vs. ETHAN ESTATE DEVELOPERS PVT. LTD

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ITA/582/2016HC DelhiDLHC01193325201612 August 2016Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MS. JUSTICE DEEPA SHARMA2 pages
AI SummaryDismissed

What did the High Court hold?

The ITAT deleted the disallowance, finding the transactions were not on a commission basis. The High Court agreed, noting that similar issues had been decided against the revenue in prior cases.

What were the facts?

The assessee claimed a deduction for payments made to a consolidator, arguing the transactions were on a principal-to-principal basis. The revenue contended these were commission payments subject to tax deduction at source.

What were the issues?

Whether payments made to a consolidator for transactions on a principal-to-principal basis are subject to disallowance under Section 40(a)(ia) for non-deduction of tax at source.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

$~18 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 582/2016 & C.M.No.29418-29414/2016

COMMISSIONER OF INCOME TAX- IV ..... Appellant Through: Mr.Zoheb Hossain, Senior Standing Counsel and Mr.Deepak Anand, Junior Standing Counsel for the Revenue.

versus

ETHAN ESTATE DEVELOPERS PVT. LTD. ..... Respondent Through: Ms.Kavita Jha and Ms.Mehak Gupta, Advocates

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA

O R D E R %

12.08.2016

1.

The question of law sought to be urged is as to the correctness of the ITAT’s decision in directing the deletion of disallowance under Section 40 (a) (ia) of the Income Tax Act to the tune of Rs.3,91,96,453/-. 2. The assessee had claimed deduction to the extent of the aforesaid amount as having been paid to a consolidator M/s Vikram Electric Equipment Private Limited. The assessee’s contentions were that the transactions were on principal to principal basis. On the other hand, revenue contended that transactions were on commission between agent, broker and a purchaser and consequently, the amounts paid to the consolidator were tax deductible. The revenue’s

contentions were rejected by ITAT in cross appeal preferred by the assessee. 3. It is brought to the notice of this court that the question of law sought to be urged stands covered – against the revenue in the decision of this court in Commissioner of Income Tax vs. Zebian Real Estate Private Limited ITA 257/2015 decided on 5.11.2015 as well as Commissioner of Income Tax vs. Invecon Private Limited ITA 324/2016 decided on 13.07.2016, Commissioner of Income Tax vs. Mohak Real Estate Private Limited ITA 928/2015 decided on 08.12.2015 and other cases. As a consequence following the decisions, we are of the opinion that there is no infirmity in the impugned order and no question of law arises. 4. Appeal along with the pending applications is consequently dismissed.

S. RAVINDRA BHAT, J

DEEPA SHARMA, J AUGUST 12, 2016 rb

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