COMMONWEALTH DEVELOPERS PVT. LTD,FATORDA vs. ACIT, SPECIAL RANGE, PANAJI

आदेश / ORDER

PER R.S.SYAL, VP :

This appeal by the assessee arises out of the order dated

21-04-2022 passed by the CIT(A) in National Faceless Appeal

Centre (NFAC), Delhi in relation to the assessment year 2017-18.

of disallowance of Rs.43,48,000/- towards brokerage paid by the

assessee on sale of flats.

engaged in the business of real estate development. It claimed

deduction towards brokerage of Rs.43,48,000/-. On being called

2 ITA No.49/PAN/2022 Commonwealth Developers Pvt. Ltd.

upon to furnish the necessary details in support of the brokerage, the

assessee submitted party-wise detail of 23 persons to whom such

brokerage was paid. The Assessing Officer (AO) made the

disallowance of the entire brokerage on the ground that the assessee

failed to furnish justification for the payment. The ld. CIT(A)

affirmed the addition, against which the assessee has approached the

Tribunal.

relevant material on record, it is seen that the assessee furnished

necessary details of the persons to whom brokerage was paid

totalling to Rs.43.48 lakh on sales of Rs.37,38,38,261/-, which

comes to 1.16%. A chart has been placed on record showing the

position of brokerage paid in earlier years. For the immediately

preceding year, the assessee paid brokerage of Rs.27,90,000/- on

turnover of Rs.11,25,00,000/-, which comes to 2.48%. The case for

the immediately preceding A.Y. 2016-17 was taken up for scrutiny

u/s.143(3) and the AO did not make any disallowance on this score.

A year prior, namely, A.Y. 2015-16, the assessee paid brokerage at

the rate of 2.99% of the total sales, which was also allowed by the

AO in the assessment u/s.143(3). For the A.Y. 2014-15, the

assessee paid brokerage at 1.52%, which was also allowed by the

AO u/s.143(3) of the Act. It, therefore, transpires that for all the

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earlier years, the assessee paid brokerage in the same manner as it

paid for the year under consideration. Assessments for all the

immediately preceding three years were taken up for scrutiny

u/s.143(3) and deduction of brokerage was allowed. In the year

under consideration, the assessee paid brokerage at 1.16% as against

the immediately preceding assessment year at 2.48% and 2.99% a

year prior. Thus, the brokerage paid during the year under consideration is quite reasonable vis-a-vis the earlier years. In our

considered opinion, once the brokerage has been allowed in all the

earlier years and the assessee furnished the details of the persons to

whom the brokerage was paid, there was no reason on the part of

the AO to disallow it on the ground that no justification was given

for payment. We, therefore, overturn the impugned order and direct

to delete the addition.

Order pronounced in the Open Court on 14th September, 2023.

Sd/- Sd/- (S.S.VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 14th September, 2023 सतीश

4 ITA No.49/PAN/2022 Commonwealth Developers Pvt. Ltd.

आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The respondent 2. 3. The Pr.CIT concerned 4. DR, ITAT, Panaji Bench, Panaji गाड� फाईल / Guard file. 5.

आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 13-09-2023 Sr.PS 2. Draft placed before author 14-09-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *