TMI Blog2010 (11) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.1 That the learned CIT(Appeals) has erred in confirming the disallowance of50% discount of ₹ 19,88,211 out of total discount of ₹ 39,76,422. 1.2 That the various reasons advanced by the learned CIT(Appeals) in confirming the disallowance are contrary to the facts of the case and evidence on record. 1.3 The appellant respectfully submits that on facts of the case entire expenditure of discount being incurred wholly and exclusively for the purpose of business be allowed. And following ground No.1.1 to 1.5 in assessment year 2004-05:- ITA No.358/Ahd/2008 1.1 The Learned CIT(Appeals) has erred in confirming the disallowance of discount of ₹ 228961 out of total discount of ₹ 457922. 1.2 That the various reasons advanced by the learned CIT(Appeals) in confirming the disallowance are contrary to the facts of the case and evidence on record. 1.3 The appellant further respectfully submits that there is a gross mistake on the part of CIT(Appeal) in taking disallowance figure. Therefore the correct figure are as under: PARTICULARS AMOUNT CONSIDERED BDY CIT(APPEAL) AMOUNT CONSIDERED BY A.O Total discount expenses 457922 457922 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant did not file confirmation from these parties that they received higher amount of discount, as claimed by the appellant. The appellant has submitted that it has to pay discount to HDFC amounting to ₹ 8,34,980/-. In this respect, the AO has allowed the discount given in the bills as well as 50% of the discount of the remaining amount of ₹ 39,76,422/-. The AO has thus allowed the discount of ₹ 19,88,211/-, which will cover the discount allowed to HDFC bank and finance companies. Hence, in view of the facts gathered by the AO and as discussed in the ast. order and test checking the claim of discount, it is held that the AO was quite justified in disallowing the claim of discount of ₹ 19,88,211/- out of the total claim. This ground is, therefore, rejected. Aggrieved, assessee came in second appeal before us. 4. Before us Ld. SR-Counsel for the assessee, Shri S.N.Soparkar stated that the assessee has filed copy of account and copy of sales bills in respect of purchasers to whom the discount is given before the Assessing Officer. The assessee was also incurring expenses of RTO and if the amount recovered was less, the same was claimed as discount and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the customers on the discount vouchers. The Assessing Officer has observed that certain details such as the sales invoices for the sale of cars, delivery notes and the discount vouchers, etc., were produced by the assessee very late. The AO has also observed that the file denoted as NAM-4 produced by the assessee in support of its contention of having received short payments in some cases contained only one sales bill and the rest of the documents in the file were the copies of delivery notes which did not contain any details of discounts allowed to the customers and short payments received from the customers. It has been stated by the AO that the filing of delivery notes is of no use. The AO also observed that the assessee should have been shown discounts allowed by way of deduction. The AO also observed that there is a difference of few days between the date of issue of delivery notes and the cash discount vouchers. The AO also stated that it is not acceptable that the signatures of the customers on the discount vouchers would match with the signatures of the customers on delivery notes for the cars in all cases since the human probability mandates that in some cases the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 15,95,088/-, I agree with the appellant that it cannot be the case that hundreds of customers would collide with the appellant by making 95% to 98% of the bill value through cheques/demand drafts and by making payments of 2% to 5% of the bill values which have been claimed as discounts by cash, so as to enable the appellant to evade payment of income-tax. On the contrary, since as per the Income-tax Rules, the depreciation is allowed on the value of cars, the customers would not be inclined to under-state the purchase price of the vehicle by making part payment of purchase value in cash to oblige the appellant. Besides, neither the A.O who completed the set aside assessment has been able to bring on record an iota of evidence suggestive of the fact that the appellant understated the sales consideration and that the appellant received more amounts against the sales of cars than those recorded in the books of accounts. The copy of sales bills and the copy of ledger accounts filed by the appellant before the A.O and also before me clearly show that while the appellant received majority for the sale value through cheques/demand drafts, the small portion of say ₹ 2,000/-, &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Patel Shri Dinesh L Somani where, they have denied of any discount. As these two parties had denied discount, the onus is on the assessee to establish the discount allowed. As argued by the Ld. counsel for the assessee that he is ready to produce 20 parties to whom discount was allowed on random basis and Assessing Officer can make inquiries and can verify. We find that the plea of the assessee is quite reasonable and accordingly we direct the Assessing Officer to verify 20 parties of his choice and in case majority of these twenty parties deny the claim of the assessee, he will disallow the entire claim and in case, these parties admits, he will allow the claim of the assessee. Similarly, the other assessment year also on facts being exactly identical we allow the claim of assessee in terms of the above This common issue in these appeals of assessee is allowed for statistical purposes as the issue has been set aside to the file of the Assessing Officer. 6. The next issue in this appeal of assessee in ITA No.1213/Ahd/2007 is against the order of CIT(A) in confirming the disallowance of repair expenses holding the same as capital in nature. For this, assessee has raised the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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