Income Tax Appellate Tribunal - Delhi
Adarsh Gupta, New Delhi vs Acit, New Delhi on 14 September, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'A' : NEW DELHI)
BEFORE HON'BLE PRESIDENT, SHRI G.D. AGRAWAL
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.1392/Del./2015
(ASSESSMENT YEAR : 2011-12)
Shri Adarsh Gupta, vs. ACIT, Circle 24 (1),
D - 7/7063, Vasnat Kunj, New Delhi.
New Delhi - 110 070.
(PAN : AEUPG8697K)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : None
REVENUE BY : Smt. Aparna Karan, CIT DR
Date of Hearing : 06.09.2018
Date of Order : 14.09.2018
ORDER
PER KULDIP SINGH, ACCOUNTANT MEMBER :
The appellant, Shri Adarsh Gupta (hereinafter referred to as 'the assessee') by filing the present appeal, sought to set aside the impugned order dated 06.01.2015 passed by Ld. CIT (Appeals)-11, New Delhi qua the assessment year 2011-12 on the grounds inter alia that :-
"1. That the learned CIT (A) erred in law & facts by rejecting our contention that Rs.1,88,645 is in the nature of discount received (being brokerage passed on by the property agent through whom the booking was done) on purchase of my own immovable property and is reduction in the cost of property and no income. This addition of income may be please be deleted.
2. That the learned CIT (A) erred in law and facts in not deleting expenses of Rs.45,500 for sales tax."2 ITA No.1392/Del./2015
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : During scrutiny proceedings, Assessing Officer noticed from the perusal of 26AS statement that an amount of Rs.1,88,645/- was given to the assessee by the broker as discount against the booking of flat from Pioneer Park whereas TDS was deducted by M/s. Trust Banq Reality Pvt. Ltd. under section 194H of the Income-tax Act, 1961 (for short 'the Act') and the said amount was added to the income of the assessee by the AO. AO further made addition of Rs.45,500/- on account of sales-tax expenses.
3. Assessee carried the matter by way of appeal before the ld. CIT (A) who has partly allowed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.
4. Assessee has not preferred to put in appearance despite issuance of the notice and consequently, we proceeded to decide the present appeal with the assistance of the ld. CIT DR as well as on the basis of documents available on the file.
5. We have heard the ld. Departmental Representative for the Revenue to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
GROUND NO.1
6. Undisputedly, addition of Rs.1,88,645/- has been made by the AO on the ground that this amount has not been disclosed by the 3 ITA No.1392/Del./2015 assessee in the computation of income filed for the year under consideration. it is also not in dispute that the TDS of Rs.1,88,645/- was deducted by M/s. Trust Banq Reality Pvt. Ltd. u/s 194H of the Act. It is also not disputed by the AO that M/s. Trust Banq Reality Pvt. Ltd. was the broker of M/s. Pioneer Urban Land and Infrastructure Ltd. from which the assessee has purchased a flat.
7. In the backdrop of the aforesaid fats and circumstances of the case, we are of the considered view that during assessment proceedings when the assessee has duly explained the fact that the amount of Rs.1,88,645/- has been received by him as a discount against the booking of flat from the broker by deducting the TDS, the said amount has to be reduced from the cost of acquisition and addition thereof cannot be made.
8. Moreover, ld. CIT (A) has admitted the transaction as to the purchase of the flat by the assessee to M/s. Trust Banq Reality Pvt. Ltd. (the broker) who has paid the said amount to the assessee. It is not uncommon that the brokers in order to enhance the sale of the developer gets benefit and then passes the benefit of the same to the purchaser which has to be treated as discount.
9. When the factum of receiving the amount of Rs.1,88,645/- is inextricably linked with the purchase of the flat, the said amount would certainly accounted towards the cost of acquisition of the flat. In other words, cost of the flat shall be reduced by Rs.1,88,645/-. So, we are of 4 ITA No.1392/Del./2015 the considered view that AO as well as CIT (A) have erred in making addition on this amount which is ordered to be deleted. So, ground no.1 is determined in favour of the assessee.
GROUND NO.2
10. AO have made addition of Rs.45,500/- claimed by the assessee on account of sales-tax expenses. Undisputedly, these expenses have been booked by the assessee through profit & loss account as assessee has short-recovered the sales-tax from the parties. When the nature of the expenses itself is penal in nature on account of short-recovery on the part of the assessee, the same are not admissible expenses. So, the ld. CIT (A) has rightly upheld the addition made by the AO on this account. Hence, ground no.2 is determined against the assessee.
11. Resultantly, the appeal filed by the assessee is partly allowed. Order pronounced in open court on this 14th day of September, 2018.
Sd/- sd/-
(G.D. AGRAWAL) (KULDIP SINGH)
PRESIDENT JUDICIAL MEMBER
Dated the 14th day of September, 2018
TS
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-11, New Delhi.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.