9911796707
TMI Blog2012 (8) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... en heard and records perused. In the course of assessment u/s 143(3), the Assessing Officer observed that the assessee company is engaged in the business of advertisement . Apart from this the assessee is having 'rental income and interest on deposits. During the year under consideration, the assessee has received brokerage of Rs. l,92,00,000/- as per the agreement between Shaukat Mohd. Khan and others but assessee failed to offer the same as income as per the return of income filed for A Y 2008-09. The assessee was asked to explain the receipt of brokerage commission which was not offered for tax. In reply the AR of the assessee submitted that infact the work was done by the assessee company but on behalf of Sandhya Prakash Ltd. as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant company being broker will find a genuine purchaser to buy a said property and will carry out all sort of negotiations with the prospective buyers on behalf of the seller parties. The each seller party/ owner agreed to pay Rs.58.40 lakhs as brokerage to the said broker/appellant company in consideration of its services which the appellant company was to provide for materializing the said deal. It was also agreed that such brokerage commission shall be paid through the broker only after the said deal is completed between the seller and the buyer and the registry of the said land is done in favour of the said prospective buyer and also the payment is received from the buyer parties. In the agreement it was also provided that the broker/a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat when the seller parties are appointing the appellant company as , their broker and such agreement is signed by all the concerned parties including two independent witnesses then it cannot be believed that such brokerage work was done by the appellant company for M/s Sandhya Prakash Ltd. It is seen that the work relating to searching of buyers for the land to be sold by the seller parties was done by the appellant company. All necessary documents for such transactions were executed by the appellant company with the seller parties, payment for such brokerage was also received by the appellant company and such receipt was duly signed by the appellant company was provided to the seller parties. In facts, there is nothing on record, which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the brokerage/commission received by the DSP Finprint Limited shall be recovered" The appellant has also filed a certified copy of resolution passed by the appellant company dt 28/06/2007 which reads as under " The Chairman informed the Board that as the Company has been approached by their associate company "Sandhya Prakash Limited" to undertake the job of finding a buyer for some party (s) who wishes to sell off their land admeasurng 10.96 acres situated at Khasara No. 74/2/1 Prempura, Bhopal. "Resolved that since the company "DSP Finprint Limited" has the necessary manpower and expertise to undertake this work, it shall undertake this job on behalf of M/s. Sandhya Prakash Limited Resolved further that whatever commission /brokerag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant company. It has also been agreed upon that all work relating to sell of immovable property including execution of the registered sale deeds. All brokerage work including finding the buyer was done by the appellant company. These facts indicates that all brokerage work relating to sale of immovable property of the five seller parties was done by the appellant company and therefore the brokerage income amounting to Rs. 1.92 crores was rightly taxed in the hand of the appellant company. The appellant has wrongly diverted this income to its sister concern company to avoid proper taxation. The action of the Assessing Officer making addition of Rs. 1.92 crore is confirmed. The ground of appeal is dismissed. " 5. We have considered the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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