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TMI Blog2024 (4) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings the 3 Brokers had again issued Confirmation Letters with regard to the Brokerage paid to them by the the Appellant. The Appellant had placed on record the PAN details of the 3 Brokers. Thus all the primary facts relating to the payment of the Brokerage Commission paid by the Appellant to the 3 Brokers, had been brought on the record of the Assessing Authority by the Brokerage Commission paid by the Appellant to the 3 Brokers in the relevant FY 2020 and the corresponding payment were made through cheques by Appellant. Thus both the source of payment as well as payment documented. 2. The Learned A.O. and DRP-2 while disallowing the brokerage expense of Rs. 45 Lakh erred in appreciating the fact that Appellant providing the by the payment details of the respective brokers against the invoices issued to him and their PAN details, confirmation letter discharge its burden of payment being genuine. The onus was thereafter upon the revenue to corroborate the same by calling upon the respective brokers, their Income Tax returns, MoA, AoA of companies and verifying the veracity of the alleged transaction payment of 45Lac. 3. The Learned A.O. and DRP-2 while disallowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction and improvement cost of Rs. 31,86,363 when the same could have been corroborated by the return filed by Shri C. Prasad, Civil Contractor in his returns when the Appellant provided also the business address, contact details, payment confirmation letter, quotation building covered area with material rates of year 2010 of him. 9. The Learned A.O. and DRP-2 while disallowing the in disallowing the brokerage and construction cost of Rs. 31,86,363 when the revenue could have alternatively valued the cost of construction through the Department, Valuation Officers as the immovable build up structure (Farm) land of 2374 sq. Mtrs. Having built up area on GF,FF and terrace of 626 Sq. Mtrs or 6,817.14 Sq. Ft.) is still in existence or ought to have applied the CPWD rate of construction for 'A' class construction of Rs. 1500 Sq. Ft. in year 2010-11. 10. The Learned A.O. and DRP-2 while disallowing the in disallowing brokerage the and construction cost was in-effect re-opening the assessment of years 2011-12, which was time barred under Section 153 of I.T.A., 1963 and thus could not be called upon to verify the 10 year old transaction through Appellant to the extent of bey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in cash towards labour charges. The source of cash was explained as receipt from relatives, friends and cash in hand with the assessee. Regarding transfer expenses of Rs. 45,00,000/- towards sales commission it was stated that Rs. 15,00,000/- each was given through cheque to Mr. Tanishq Sawhney F. 3/18, Vasant Vihar, New Delhi; Sunshine Buildpro Pvt. Ltd. 14 Sainik Farm, C-3 lane Khanpur, New Delhi and Chinar Farms Pvt. Ltd. 61 Ghitorin, New Delhi. Copies of invoices and bank statement of assessee were provided as proof. It was further submitted that the assessee opened an account with Punjab National Bank on 26.11.2021 under Capital Gain Account Scheme, 1988 vide Account No. 0992001000400429 for sum of Rs. 11,50,00,000/- in the name of the assessee and produced bank certificate as also bank account statement. 6. The submissions of the assessee were not acceptable to the Ld. AO who disallowed the expenses claimed at Rs. 73,00,000/- being cost of improvement (Indexed cost of improvement Rs. 1,31,57,486); transfer expenses of Rs. 45,00,000/- for the reasons given in para 9.9 and 9.10 of the assessment order. The Ld. AO also disallowed Rs. 11,49,59,024/- being assessee's claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 144C(13) of the Act on total income of Rs. 1,26,40,460/- including therein the disallowance of transfer expenses of Rs. 45,00,000/- and the indexed cost of improvement of Rs. 57,43,085/- being expenditure incurred in cash of Rs. 31,86,363/- on civil construction against which the assessee is in appeal before the Tribunal and all grounds of appeal relate thereto. 10. The Ld. AR drew our attention to the copy of invoices/bill appearing at page 12-17 of Paper Book which were produced before the Ld. AO/DRP in support of transfer expenses paid to three parties. Details of payment e.g. names of the parties, their complete address, PAN, cheque No. and date with amount were also furnished. It is submitted that the assessee has discharged his burden of proving the genuineness of expenses incurred by him in connection with transfer of his property. The Ld. AR further submitted that there is no prevailing trade practice in real estate business to sign written agreement/contract documents for obtaining commission. The agents act upon oral instructions to look for prospective buyers. He contended that proof submitted by the assessee towards payment through banking channel could not be contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- towards sales commission in connection with transfer of property containing therein name of the party and address, PAN, Cheque No. and date and amount (page 2 of Paper Book). Copies of three invoices (page 12-17 of Paper Book) from the parties to whom commission is paid for the commission amount of Rs. 15,00,000/- each were also produced. Copy of J&K Bank statement of the assessee showing total payment of Rs. 45,00,000/- in three transactions/entries of Rs. 15,00,000/- each as per the bank statement was also submitted. It is observed from para 3.10 of the assessment order that the Ld. AO has accepted that the assessee has submitted vouchers in support of transfer expenses and that payments were made through assessee's bank account. It is therefore evident that genuineness of the impugned payment of Rs. 45,00,000/- as transfer expenses in connection with transfer of property is well established. Despite that disallowance is made only for the reason that copy of agreements with respect to commission services was not submitted. The contention of the assessee is that in real estate business there is no practice to enter into written agreement between the seller of the property and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the copy of sale deed dated 07.08.2020 placed at page 18 to 47 of the Paper Book. It describes the assessee as owner of land measuring 2 bighas and 16 biswas along with built-up house. No clear description of built-up house is given therein. Before the Ld. AO/DRP it was stated that on bare plot of land purchased in the year 2009 the assessee constructed during AY 2011-12 thereon two storey building having built-up area of 62659 meters on ground floor, first floor and terrace. There is thus no clarity about the house constructed on the land purchased. It was also stated before the Ld. AO/DRP that payments aggregating to Rs. 31,86,363/- were made to the contractor, Mr. C Prasad for civil construction. However, no details of cash paid to the contractor were given nor the Contractor has given any details of disbursement of cash to the labourers for work done by them. The source of availability of the impugned cash is also vague. If relatives and friends provided cash, the assessee ought to have brought on record details of such friends and relatives who gave monetary help. No supporting evidence has been brought on record. How much cash was available with the assessee at the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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