Itta/669/2014 Of The Commissioner Of Income Tax-I v. M/S Abhinandana Housing Pvt Ltd

HIGH COURT OF JUDICATURE AT HYDERABADFOR THE STATE OF TELANGANA AND THE STATE OF ANDHRAPRADESH PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA ANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.669 OF 2014 DATED:26.11.2014 Between: The Commissioner of Income Tax-IHyderabad … Appellant And M/s. Abhinandana Housing Pvt. Ltd.,III Floor, N.V. Plaza, Saibaba Temple StreetDwarakapuri Colony PanjaguttaHyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA ANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.669 OF 2014 JUDGMENT:(per the Hon’ble The Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred against the judgment andorder of the learned Tribunal, dt.12.2.2014, in relation to assessment year 2009-2010, on the following suggested questions of law: 1.“Whether, on the facts and in the circumstances of the case, theorder of the Tribunal is perverse?order of the Tribunal is perverse? 2.Whether on the facts and circumstances of the case, the Tribunal iscorrect in law in holding that the assessee’s case falls under thepurview of clause (k) of Rule 6DD of the Income Tax Rules, 1962,without appreciating the requirement to make payment in ‘cash’ byagents, for purchase of land on behalf of the assessee, has not beenestablished?”correct in law in holding that the assessee’s case falls under thepurview of clause (k) of Rule 6DD of the Income Tax Rules, 1962,without appreciating the requirement to make payment in ‘cash’ byagents, for purchase of land on behalf of the assessee, has not beenestablished?” The question is whether the engagement of a third party inconnection with the business by the assessee is that of an agency asrequired under Rule 6-DD(k) of the Income Tax Rules. The admittedposition is that a third party acted agents of various persons. The learnedTribunal, in our considered view correctly, concluded that there is norequirement of law that an agent must be exclusively of one principal. Abroker can be an agent because the broker might be dealing with a largenumber of customers but the element of agency is there. Therefore,deduction under Section 40A(3) of the Income Tax Act was rightlyallowed by the Tribunal. According to us, no decision is required to berendered in this matter on point of law. The appeal is accordingly dismissed. There will be no order as tocosts. ________________________ K.J. SENGUPTA, CJ _______________________ 26.11.2014 SANJAY KUMAR,J bnr