IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.14/Del/2021, A.Y. 2016-17 Vinod Bhati, Income Tax Officer, FCA-231, Mohana Road, Ward-2(5), Yadav Colony, Vs. Faridabad Ballabhgarh-121004 PAN: AVGPB7529Q (Appellant) (Respondent)

Appellant by Sh. Vibhor Garg, CA Respondent by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 27/11/2025 Date of Pronouncement 03/12/2025 ORDER PER PAWAN SINGH, JUDICIAL MEMBER;

1. This appeal by the assessee directed against the order of Ld. CIT(A), Faridabad dated 28.02.2020 for the assessment year (‘AY’) 2016-17. The assessee has raised following grounds of appeal:

“The assessee is engaged in the business of property dealing.

He purchased agricultural land in palwal in acres and did plotting and sold it to various customers.

For selling the plots he set up works office in various areas of Faridabad and palwal and paid rent accordingly.

Ground appeal No 1 Commission expenses = Rs 1,64,40,646/- added to the returned Income In order to sale his plots he had to pay commission @20% on sales to various persons. In property dealing business, it is customary to pay commission for the purpose of operating the Business and to enhance the sales to get better price.

The commission expenses ledger along with the vouchers were submitted to A.O. for verification.

However, the Ld. ITO did not took coznigance of the same and added the full commission expenses to the tune of Rs 1,65,04,646/- to the returned income.

More so we had moved an application to Hon'ble CIT(APPEALS) dated 27/01/2020 regarding additional evidence of the expense of the commission.

However, Hon'ble CIT(Appeal) did not consider the contention and mentioned in his order that "Appellant has failed to prove even the basic identity of the persons to whom such commission has been paid"

Even though vouchers were submitted mentioning the name and address and their signature were affixed on it.

Ground Appeal No 2 Rental Expenses: Disallowed Rs 12,19,500/-

The rent agreements were submitted to the Ld Assessing Officer. The ledger of Rental Expenses were also furnished.

However, Ld. ITO did not consider the same and allowed rental expenses partially.

In the CIT(Appeals), the assessee moved an application for additional evidence dated

27/01/2020 to submit rent agreement for his perusal.

However, this contention was not accepted by the Hon’ble CIT(Appeals) and he has mentioned in his order that “The appellant has not furnished the documentary evidence in respect of the Balance.”

2. The brief facts of the case as gathered from the orders of lower authorities are that the assessee is individual filed his Income Tax Return (‘ITR’) for A.Y. 2016- 17 on 20.10.2016 declaring income of Rs. 7,51,830/-. The case was selected for scrutiny. During the assessment year, the Assessing Officer (‘AO’) noted that in the profit and loss account, the assessee has debited commission expenses of Rs. 1.65 crore. The AO issued a show cause notice to the assessee to furnish ledger account along with relevant evidence to justify such commission expenses. The AO recorded that the assessee furnished only ledger account of commission expenses with some vouchers. On perusal of such details and vouchers, the AO formed his view that assessee booked daily commission expenses and not provided the name of such persons to whom commission was paid. The assessee is engaged in plotting of land in Palwal. The commission payment is kept below Rs. 5,000/-. Only three vouchers showing aggregate payment of Rs. 49,500/- were furnished, which cannot identify the person to whom such commission was paid. The AO recorded sale of plots in the year under consideration is of more than Rs. 7.00 crores which is comparatively on higher as it was Rs. 86.44 lacs in earlier year. In earlier year, the assessee had not debited such commission payment. The AO treated such commission payment as bogus and added to the incom