9911796707
TMI Blog2017 (12) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and circumstances of the case. 2.1. The brief facts of this issue is that the assessee company is a dealer of Maruti Vehicles, spare parts, dealing in shares and securities and also engaged in property business. The return of income for the Asst Year 2011-12 was filed by the assessee on 30.9.2011 electronically declaring total income of Rs. 1,74,11,003/-. In the assessment order, the ld AO observed that the assessee submitted various details, lists and photocopies of various documents in support of assessee's claim of expenditure and on various queries raised in the course of hearing. The Tax Audit Report was furnished before the ld AO together with its annexures. The ld AO observed that the assessee had received dividend income of Rs. 19,53,720/- and claimed the same as exempt income. The Tax Auditor in his Tax Audit Report had mentioned the amount inadmissible u/s 14A of the Act in respect of expenditure incurred in relation to income which does not form part of total income at Rs. 5,22,194/-. However, the ld AO observed that no such expenses was disallowed by the assessee in the return of income. The assessee was show caused as to why the disallowance u/s 14A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, 1961 read with Rule 8D(ii) of the I.T. Rules, 1962. 2.3. We have heard the rival submissions. We find that the only aspect to be decided in this issue is with regard to deletion of disallowance under Rule 8D(2)(ii) of the Rules. From the perusal of the balance sheet as on 31.3.2011 of the assessee, the financials of the assessee reflect as under:- 31.3.2011 31.3.2010 Share Capital 4,00,00,000 4,00,00,000 Reserves and Surplus 25,54,74,637 24,26,49,245 Secured Loans 2,21,08,122 77,65,348 Unsecured Loans 2,19,00,000 1,05,06,250 Investments 10,90,23,790 9,98,53,636 Interest Paid 38,33,786 44,46,763 Apparently, there is sufficient own funds available with the assessee company for making the investments. But we find that the investments were carried over from the earlier years and whether the same were made out of own funds or out of borrowed funds, the details of which are not available before us. That is precisely the requirement of the Hon'ble Jurisdictional High Court in the case of Dhanuka & Sons vs CIT reported in 339 ITR 319 (Cal), warranting the assessee to prove the sources for making the investments in the respective years as to whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n one hand and that portion which we have to bear - and hence comes the question of discount which is known as 'cash discount', Special Discount, MSIL scheme discount, cash discount accessories, Discount accessories (foc), cash discount for vehicle price difference, cash discount vehicle (After Vat). Enclosed is the ledger of cash discount for the month of april as a sample for your kind perusal and record. ................. Encl: 1. Discount break up 2. Cash discount ledger in columnar form with discount details for April 2010 3. ISL Discount statement for April 4. Various discount scheme of Maruti 5. Maruti Auditor Bill 3.1. The assessee also enclosed a detailed note on each discount allowed by it as under:- 1. Cash Discount- Vehicle The Company has given Cash Discount- Vehicle amounting to Rs. 3,17,97,164/- during the year. The discount has been given to customers as per discount policy of M/s Maruti Suzuki India Ltd. Month wise detailed ledgers are enclosed. The discount given to the customers are reflected in the Sale Bill. Few copies of Sale Bill are also enclosed. Copies of monthly discount scheme of MSIL are enclosed. 2. Special Discount (M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnish any supporting documents / details to substantiate its claim of discount allowed. Further it failed to reconcile the discount received from MUL with that of discount allwoed to customers. The ld AO further observed that it is noticed that the assessee has allowed discount for insurance, cash discount-accessories, discount on spares and others etc which are not supported by any documentary evidences. Accordingly, he proceeded to disallow the entire discount allowed in the sum of Rs. 3,74,41,906/- in the assessment. 3.3. Before the ld CITA, it was submitted that the discount is deducted direct from the value bills raised on the customers while billing for the price of car and only net payment is received after deduction of the discount and further credit on account of the initial advance or deposit paid by the customer while booking the car. It was emphasized that no discount was paid separately to customers rather the same was reduced from the bills raised on the cutomers and customer makes the final payment of the price of the car, accessories, insurance premium only after the credit for the aforesaid discount allowed to them. Infact VAT / Sales tax is also charged on the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to year on a continuous basis and the same was not disallowed in the past given the fact that the assessee was in the same business of dealership of Maruti cars for the past 35 years or so and most of the assessments were completed under scrutiny assessments. I find that the AO has not brought on record any cogent material that the discount was not paid to customers and that the same was reimbursed by MUL. In view of this, I do not find any merit in the action of the AO in disallowing the discount paid to customers. The disallowance is therefore directed to be deleted. This ground is allowed." 3.5. Aggrieved, the revenue is in appeal before us on the following ground:- 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,74,41,906/- made by the AO on account of disallowance of discount allowed. 3.6. We have heard the rival submissions. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. We find that the assessee had filed complete details of discounts provided to the customers by way of deduction from the sale bills under and details of discounts allowed to cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in subsequent years and amounts adjusted against sales invoices in subsequent years. The ld AO observed that the assessee failed to furnish any further explanation as to why the sums were received and part refunded. Further he observed that the assessee could not furnish any documentary evidence to substantiate its claim, i.e scheme under which sums were received, name of the party, complete address, PAN, assessment jurisdiction etc to verify the genuineness of aforesaid deposits of Rs. 1,06,85,656/-. He further observed that it is beyond the human probability that every party has advanced a sum of Rs. 10,000/- only to the assessee company. He accordingly added the entire advance from customers in the sum of Rs. 1,05,85,656/- as unexplained cash credit u/s 68 of the Act. 4.2. Before the ld CITA, the assessee submitted that for booking any car, customers have to deposit initial money. The ld AO has doubted the basic rule of the trade that for booking any car, an initial booking deposit has to be made along with the booking form itself when all the details of the customers including their PAN are noted. Accordingly it was stated that the deposit from the customers for booking of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the balance sheet and had filed the following details regarding the same :- a) Statement of advance received from customers under each head as on 31.3.2011 and amounts adjusted thereon either by way of refund or adjusted with sales invoices (enclosed in page 43 of paper book) ; b) Break up of advance received from customers as on 31.3.2010 date wise and party wise specifying the amount received thereon (enclosed in pages 44 to 53 of paper book) ; c) Break up of advance received from customers as on 31.3.2011 date wise and party wise specifying the amount received thereon together with the details of amounts either refunded or adjusted with sales invoices in the subsequent period (enclosed in pages 54 to 61 of paper book). We also find that the assessee had been showing the similar advances from customers under various heads and reflected the same under sundry creditors and no additions were made in this regard in the scrutiny assessments completed u/s 143(3) of the Act for the Asst Years 2009-10 and 2010-11 by the ld AO. We find that this addition has been made by the ld AO without appreciating the business model of the assessee. It is very usual for a car dealer such a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
