HIGH COURT OF JUDICATURE AT HYDERABAD
FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.669 OF 2014 DATED:26.11.2014 Between:
The Commissioner of Income Tax-I Hyderabad … Appellant And M/s. Abhinandana Housing Pvt. Ltd., III Floor, N.V. Plaza, Saibaba Temple Street Dwarakapuri Colony Panjagutta Hyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE 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 and order 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, the order of the Tribunal is perverse?
2. Whether on the facts and circumstances of the case, the Tribunal is correct in law in holding that the assessee’s case falls under the purview of clause (k) of Rule 6DD of the Income Tax Rules, 1962, without appreciating the requirement to make payment in ‘cash’ by agents, for purchase of land on behalf of the assessee, has not been established?”
The question is whether the engagement of a third party in connection with the business by the assessee is that of an agency as required under Rule 6-DD(k) of the Income Tax Rules. The admitted position is that a third party acted agents of various persons. The learned Tribunal, in our considered view correctly, concluded that there is no requirement of law that an agent must be exclusively of one principal. A broker can be an agent because the broker might be dealing with a large number of customers but the element of agency is there. Therefore, deduction under Section 40A(3) of the Income Tax Act was rightly allowed by the Tribunal. According to us, no decision is required to be rendered in this matter on point of law.
The appeal is accordingly dismissed. There will be no order as to costs.
K.J. SENGUPTA, CJ 26.11.2014 SANJAY KUMAR, J bnr