Tribunal allows appeal, treats disputed amount as business income, permits expenses, and directs tax pursuit of landowner.

The Tribunal allowed the assessee's appeal by treating the disputed amount as business income, permitting claimed business expenses, and deleting the addition of land sale proceeds. The AO was directed to pursue the real landowner for tax liability. The decision was issued on July 10, 2017.

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Issues Involved:
1. Treatment of Rs. 7,50,000/- as "income from other sources" instead of "business & profession".
2. Disallowance of Rs. 1,76,583/- claimed as business expenses.
3. Treatment of land sale transaction and related income of Rs. 2,69,37,000/-.

Issue-wise Detailed Analysis:

1. Treatment of Rs. 7,50,000/- as "income from other sources" instead of "business & profession":
The assessee argued that the income of Rs. 7,50,000/- should be treated as brokerage income under "business & profession" rather than "income from other sources". The assessee maintained proper books of accounts, provided details of individuals from whom brokerage was earned, and had been declaring such income in previous years, which was accepted by the department. The Tribunal found that the assessee had been consistently showing brokerage income in earlier years, and the department had accepted this. The AO did not make any inquiries from the persons listed by the assessee. Therefore, the Tribunal directed the AO to treat the Rs. 7,50,000/- as business income and allow the related expenses. The net profit declared at Rs. 5,77,816.65 was to be treated as net profit from business of brokerage.

2. Disallowance of Rs. 1,76,583/- claimed as business expenses:
The assessee claimed expenses of Rs. 1,76,583/- incurred on business receipts. The AO disallowed these expenses on the ground that the specific particulars of land transactions were not provided and the payments received in cash were not verifiable. The Tribunal found that the assessee had provided sufficient details regarding the transactions and the parties involved. Since the AO did not conduct any inquiries to verify the claims, the Tribunal directed the AO to allow the expenses claimed by the assessee.

3. Treatment of land sale transaction and related income of Rs. 2,69,37,000/-:
The main issue was whether the sale consideration of Rs. 2,69,37,000/- from the land belonging to Shri Sultan Meena could be taxed in the hands of the assessee, who was the Power of Attorney holder. The assessee provided evidence, including the power of attorney and revenue records, showing that the land was owned by Shri Sultan Meena and the assessee acted as an agent. The AO doubted the transaction due to the non-production of Shri Sultan Meena and the lack of receipt by the owner. The Tribunal noted that there was no material evidence suggesting that the assessee received the sale consideration as the owner. The Tribunal referred to the judgment of the Hon'ble Madras High Court in the case of C. Sugumaran, which held that a power of attorney does not transfer ownership. The Tribunal concluded that the receipt of money by the assessee, if not handed over to the landowner, would be a liability and not income. Therefore, the Tribunal directed the AO to delete the addition of Rs. 2,69,37,000/- and take action against the real owner as per law.

Conclusion:
The Tribunal allowed the appeal of the assessee, treating the Rs. 7,50,000/- as business income, allowing the expenses of Rs. 1,76,583/-, and deleting the addition of Rs. 2,69,37,000/- while directing the AO to take action against the real owner of the land. The order was pronounced in the open court on July 10, 2017.

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