Gurcharanjeet Singh and Sons vs ITO

For the reasons stated in the application, the delay is condoned. The application stands disposed of.

ITA No. 1564 of 2006:

In this appeal u/s 260A of the Income Tax Act, 1961 (hereinafter referred to as ''the Act)the revenue is aggrieved by an order dated 12-1-2007 passed by the Income Tax Appellate Tribunal (''Tribunal''), Delhi Bench ''D'' New Delhi in ITA No. 218/Del/2002 relevant for the assessment year 1998-99.

The assessee runs a guest house in Pahar Ganj, New Delhi. It appears that the assessee pays some commission to auto rickshaw drivers and rickshaw pullers who bring customers to the guest house. According to the assessee the extent of commission paid was 34.93 per cent of the total rent received by the assessee from the guest house business. The assessee claimed that Rs. 7,04,465 had been paid as commission in the year in question.

The assessing officer found that some sort of vouchers were prepared by the assessee. These only indicated the registration number of the auto rickshaws and not the identity of the drivers to whom the commission was paid. On going through the evidence on record, the assessing officer came to the conclusion that the commission claimed to have been paid by the assessee was very high. He estimated that it should be in the range of about 15 per cent of the rental income received by the assessee. Accordingly, the assessing officer allowed a deduction towards payment of commission in the sum of Rs. 4,01,983.

The Commissioner (Appeals) was not in agreement with the assessing officer and, therefore, deleted the entire disallowance. In other words he permitted the assessee the entire sum of the commission paid as a deduction.

In the appeal by the revenue, the Tribunal came to the conclusion that the assessing officer was, on the basis of the material that was placed before him, justified in coming to the conclusion that assessee was entitled to deduction of only a part of the commission paid to the auto rickshaw drivers and rickshaw pullers. However, on the basis of the estimates which it considered reasonable, the Tribunal increased the commission allowable as deduction to 25 per cent of the actual rental receipts.

Having heard learned Counsel for the assessee, we are of the view that this is really a matter within the discretion of the authorities below. It is not appropriate for this court u/s 260A of the Act to substitute its opinion for that of the authorities.

No perversity has been shown to us by learned Counsel for the assessee on the view taken by the Tribunal.

In our opinion no substantial question of law arises for consideration.

The appeal is dismissed.