TMI Blog2011 (4) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2,73,32,019 on account of cash subvention expenses. 3. Learned representatives fairly agree that whatever we decide on this issue in assessee s appeal for the assessment year 2003-04, which was heard alongwith this appeal, will apply mutatis mutandi on this appeal as well. Vide our order of even date, we have upheld the grievance of the assessee and held that the claim of subvention expenses is admissible in nature. While doing so, we have, inter alia, observed as follows: 4. The relevant material facts are like this. The assessee is engaged in the business of marketing and promotion of financial products and services, such as credits cards, automobile loans, personal loans, merchant establishments, e broking accounts, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts amounts paid by cheques to the car dealer or to the customer directly which ends up reducing the margin money outgo of the assessee. The assessee also explained the mechanism of these subvention payments. All this, however, failed to impress the Assessing Officer who rejected the submissions of the assessee on the grounds that (a) the assessee has not established necessity of making such payments to the car dealers; (b) the assessee has not produced any evidence that its customers wanted such concessions; (c) the assessee has not submitted confirmations evidencing receipt of such discounts; (d) the assessee could not explain as to why receipts , for payments of cash subvention by the assessee on behalf of the customers, were in the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its expenditure not supported by evidence and, therefore, cash subvention expenses of ₹ 92,04,873 have rightly been disallowed by the Assessing Officer 5. The assessee is not satisfied with the stand so taken by the CIT(A) and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 7. During the course of hearing of this case, we also picked up a few sample cases of marketing auto loans and grant of subvention expenses and examined the complete sequence of transactions in such cases. We find that the assessee is using subvention expenses, as an additional incentive out of the commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipt is in the name of the customer. The payment is made through banking channels but is made on behalf of the customer, and as a part payment of down payment, and it is for this reason that the receipt is made out in the name of the customer. Then payments are properly documented and are linked to the specific customers and in respect of specific finance transactions. It is for the customers of the assessee to decide as to which form of subvention they prefer and merely because the assessee has a form of subvention, i.e. by way of reduction of EMIs, it cannot be said that there was no need of other forms of subvention expenses. These are matters of commercial exigencies and the assessee is the best person to decide how should he run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of transparent and uniform policies regarding cash subvention expenses cannot be allowed. However, we are unable to see any merits in this objection either. What has been termed as subvention expenses either by way of reduced EMIs or lower down payments is essentially in the nature of a discount and it is not really necessary that in order of discount being an admissible expense, the same must be allowed to all customers on a uniform basis. It is for the assessee to decide as to in which cases, depending upon the market conditions and depending upon the need to give discount to attract the customer, assessee should give discount. A uniform discount policy cannot be a condition precedent for grant of deduction in respect of discou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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