ITO, Faridabad V. Sh. Nafe Singh Gahalawat, Faridabad

ITA 3848/DEL/2012

• Counselvise Citation: 384820114 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 09-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 25-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GAGAN SOOD
• Keywords: Business income; Business expenditure; Additional evidence; Fair market value
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI RAJPAL YADAV, JM ITA NO: 3848/DEL/2012 AY : - 2008-09 ITO, WARD 11(3) VS. NAFE SINGH GAHALAWAT BLOCK B, CGO COMPLEX, NH IV H.NO. 1032, SECTOR 14 FARIDABAD FARIDABAD PAN: AANPG 3944 N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURJEET SINGH, C.A.. RESPONDENT BY: SHRI GAGAN SOOD, SR.D.R. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARID ABAD DT. 23.4.2012 PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. FACTS IN BRIEF:- THE FACTS ARE RECORDED AT PARA 4, PAGE OF THE LD.CIT(APPEALS)S ORDER WHICH IS EXTRACTED FOR READ Y REFERENCE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE RETUR N OF INCOME DECLARING INCOME OF RS.18,06,140/- WAS FILED BY THE ASSESSEE ON 29.9.20 08, WHICH WAS PROCESSED U/S 143(1) OF THE ACT ON 30.11.2009. THE ASSESSEE IS R ETIRED FROM INDIAN AIR FORCE AS WING COMMANDER AND ENGAGED IN THE BUSINESS OF PR OPERTY DEALER AND CONSULTANT AS PROPRIETOR OF M/S U.CHOUDHARY ESTATE A GENCY. THE ASSESSEE HAS DECLARED INCOME FROM COMMISSION ON BOOKING OF FLATS /PLOTS AND OTHER SOURCES. THE CASE WAS SELECTED FOR SCRUTINY AND A NOTICE U/S 143(2) WAS ISSUED ON PAGE 2 OF 9 25.9.2009. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSE HAD DECLARED GROSS COMMI SSION RECEIPTS AMOUNTING TO RS.1,06,95,491/- (EXCLUSIVE OF SERVICE TAX) FROM BU SINESS PARK AND TONW PLANNERS LTD. (BPTP) AGAINST WHICH EXPENDITURE ON ACCOUNT OF DISCOUNT FORWARDED WAS CLAIMED TO THE EXTENT OF RS.81,17,040 /-. THE DETAILED FILED IN THIS REGARD REVEALED THAT THE ASSESSEE FORWARDED DISCOUN T OF RS.35,03,883/- TO HIS SON SHRI ASHISH, RS.7,05,000/- HIS WIFE SMT.URVASHI AND RS.50,000/- TO HIS DAUGHTER IN LAW SMT.POOJA. ON THE BASIS OF DETAILS , THE ASSESSING OFFICER OBSERVED THAT DISCOUNT TO HIS SON WAS ONLY IN RESPE CT OF ONE PLOT NO. D-36, SECTOR 85, FARIDABAD AND DISCOUNT TO HIS WIFE WAS I N RESPECT OF TWO PLOTS. CONSIDERING THE PROVISIONS OF SECTION 40A(2)(B) AND REASONABLE AMOUNT OF DISCOUNT OF RS.50,000/- FOR EACH PLOT, THE ASSESSIN G OFFICER HAS DISALLOWED RS.40,58,883/- OUT OF TOTAL DISCOUNT FORWARDED OF R S.42,58,883/-. A SUM OF RS.10,83,555/- BEING SERVICE TAX WAS OUTSTANDING AS PAYABLE ON 31.3.2008 WHICH WAS NOT PAID ON OR BEFORE THE DUE DATE OF FIL ING OF RETURN. THE ASSESSING OFFICER HAS MADE ADDITION OF SAME BY INVOKING THE P ROVISIONS OF SECTION 43B OF THE ACT. ON EXAMINATION OF LEDGER ACCOUNT FILED BY THE ASSESSEE AS APPEARING IN THE BOOKS OF BPTP, THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE HAS UNDERTAKEN AND PAID LIABILITIES TOWARDS PAYMENT OF INSTALMENT AND INTEREST OF OTHER PERSONS WHICH WAS DEBITED IN THE SAID ACCOUNT BUT NOT ALLOWABLE AS BUSINESS EXPENDITURE. CONSEQUENTLY, A SUM OF RS.16 ,78,601/- HAS BEEN ADDED TO THE INCOME. BESDIES, THE LIABILITY TOWARDS INT EREST PAID TO BPTP AND PERTAINING TO THE PLOTS BOOKED BY THE ASSESSEE WAS ALSO DEBITED IN THE SAID LEDGER ACCOUNT WITH BPTP WHICH HAS BEEN DISALLOWED AS NOT BEING A BUSINESS EXPENDITURE BUT PERSONAL LIABILITY OF THE ASSESSEE. 3. ON APPEAL THE FIRST APPELLATE AUTHORITY ACCEPTED T HE CONTENTIONS OF THE ASSESSEE AND GRANTED RELIEF. AGGRIEVED, THE REVENU E HAS FILED THE PRESENT APPEAL BEFORE US ON THE FOLLOWING GROUNDS. PAGE 3 OF 9 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD.CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN NOT SUSTAINING THE WHO LE ADDITION OF RS.40,58,883/- BY OBSERVING THAT THERE IS NO EFFECTIVE YARDSTICK FOR COMPARISON, IN THE FACTS AND CIRCUMSTANCES OF THE CASE I DEEM IT FAIR AND REASON ABLE TO DISALLOW 25% OF DISCOUNT FORWARDED TO SHRI ASHISH AND SMT.URVASHI A S EXCESSIVE AND UNREASONABLE AND SUSTAIN THE ADDITION TO THE EXTENT OF RS.10,14,720/-. LD.CIT(APPEALS) HAS IGNORED THE FACT THAT THE DISCO UNT FORWARDED TO HIS FAMILY MEMBERS IS FAR BEYOND THE LIMIT OF COMMISSION PAYAB LE BY BPTP TO THE ASSESSEE WHICH PROVES THAT THE ASSESSEE IS DIVERTING HIS INC OME IN THE NAME OF HIS FAMILY MEMBERS TO MINIMIZE HIS TAX LIABILITY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD.CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.16,78,601/- WHICH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISCOUN T FORWARDED WHEN THE ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM. 3. . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.3,84,563/- BY OBSERVING THAT THE AMOUNT HAS BEEN ADDED TWICE, APART FROM H AVING BEEN ALREADY INCLUDED IN THE TOTAL ADDITION OF RS.16,78,601/-. LD.CIT(AP PEALS) HAS IGNORED THE FACTS THAT THESE ARE SEPARATE ENTRIES WHICH HAVE BEEN DEB ITED TO DISCOUNTED FORWARDED AMOUNT BUT WERE NOT REFLECTED IN THE LEDG ER ACCOUNT OF THE ASSESSEE WITH BPTP. 4. . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.10,83,555/- WHICH WAS MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVI SIONS OF SECTION 43B OF THE ACT AS THE SERVICE TAX PAYABLE IN THE BALANCE SHEET WAS NOT DEPOSITED BEFORE DUE DATE OF FILING OF RETURN. 5. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 4 WE HAVE HEARD SHRI GURJEET SINGH, THE LD.COUNS EL FOR THE ASSESSEE AND SHRI GAGAN SOOD, LD.SR.D.R. ON BEHALF OF THE REVENU E. 5. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE AND PERUSAL OF PAPERS ON RECORD, ORDERS OF THE AUTHORIT IES BELOW, WE HOLD AS UNDER. PAGE 4 OF 9 6. ON GROUND NO.1 THE FIRST APPELLATE AUTHORITY HAS ADMITTED ADDITIONAL EVIDENCE AND ALSO CALLED FOR A REMAND REPORT. AF TER CONSIDERING THE REMAND REPORT THE LD.CIT(APPEALS) CONCLUDED AS FOLLOWS:- I HAVE CONSIDERED ALL THE RELEVANT MATERIAL ON THI S ISSUE. THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE FAILED TO SUBSTANTIATE H IS CLAIM OF DISCOUNT FORWARDED TO HIS FAMILY MEMBERS WHILE COMPARING WITH THE CASE S OF OTHER CUSTOMERS FOR THE SAME DESCRIPTION OF THE PROPERTY. NO COGENT REASON WERE GIVEN FOR GIVING A DISCOUNT OF ABOUT RS. 42.00 LACS FOR JUST THREE PLO TS TO HIS FAMILY MEMBERS OUT OF WHICH MORE THAN RS.35.00 LACS WAS GIVEN AGAINST ON E PLOT IN THE NAME OF HIS SON WHEREAS THE DISCOUNT RANGING BETWEEN RS.10,000/ - TO RS. 50,000/- WAS PAID TO OTHER CUSTOMERS. ASSESSEE MADE PAYMENTS OF INS TALLMENTS OF PLOTS/PROPERTIES AND INTEREST OWNED BY HIS FAMILY M EMBERS OUT OF HIS COMMISSION INCOME AND ADJUSTED DISCOUNT FORWARDED E XPENSES AGAINST COMMISSION, WHICH WAS NOT ALLOWABLE AS BUSINESS EXP ENDITURE. HOW THE INSTALLMENT OF THE PLOTS/PROPERTIES AND INTEREST T HEREON OWNED BY HIS FAMILY MEMBERS CAN BE ALLOWED TO BE ADJUSTED IN THE DISGUI SE OF DISCOUNT FORWARDED AGAINST THE BUSINESS INCOME OF THE ASSESSEE. THE AS SESSEE DID NOT FURNISH ANY DETAILS AS TO HOW MUCH COMMISSION HE RECEIVED ON TH ESE PLOTS/PROPERTIES IN THE NAME OF HIS FAMILY MEMBERS AGAINST WHICH HE PAID HE AVY DISCOUNT AND THE ASSESSEE CAN ONLY BE ALLOWED TO PAY MAXIMUM DISCOUN T TO THE EXTENT OF COMMISSION RECEIVED BY HIM ON THESE PLOTS/PROPERTIE S FROM BPTP. IN ABSENCE OF ANY DETAILS, DISCOUNT AS INDICATED IN THE SHOW CAUS E NOTICE @ 50,000/- ON EACH PLOT/ PROPERTY TOTALING RS. 2,00,000/ - FOR FOUR PR OPERTIES/PLOTS IN THE NAME OF HIS FAMILY MEMBERS HAS BEEN ALLOWED BY TREATING THEM AT PAR WITH OTHER CUSTOMERS. THE EXCESS PAYMENT CLAIMED AS DISCOUNT FORWARDED TO HIS FAMILY MEMBERS OF RSAO,S8,883/- HAS ACCORDINGLY BEEN DISALLOWED UNDER THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. THE AO HAS FURTHER SUBMITTED THAT, 'IT IS DENIED THAT THE ASSESSEE HAS FORWARDED THE DISCOUNT TO HIS SON SHRI ASHISH GAHLAWAT FOR SEVERAL PLOTS. AS PER RECORDS OF OFFICE IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE HAS FORWARDED DISCOUNT ABOUT RS. 42 LACS AGAINST ON LY THREE PLOTS TO HIS FAMILY MEMBERS AND OUT OF WHICH MORE THAN RS. 33 LACS HAS BEEN FORWARDED TO HIS SON SHRI ASHISH GAHLAWAT AGAINST ONLY ONE PLOT NO. D- 3 6. THE ASSESSEE DELAYED PROCEEDINGS HIMSELF BY NOT FURNISHING REQUIRED DETA ILS/INFORMATION IN TIME WHICH IS CLEARLY INFERRED FROM HIS BEHAVIOR. THE ASSESSEE CANNOT BE ALLOWED TO TAKE ADVANTAGE OF HIS WILLFUL NEGLIGENCE OF ACT AND STAT UTORY PROCEEDINGS BEFORE THE APPELLATE AUTHORITIES. THE APPELLANT HAS CONTENDED THAT THE PROFITS INCREASED TO PAGE 5 OF 9 DOUBLE AT RS.15,96,770/- OVER RS.8,35,018/- OF THE LAST YEAR, MAXIMUM CUSTOMERS WERE BROUGHT THROUGH VARIOUS MARKETING ST RATEGIES; MODUS OPERANDI OF DISCOUNT FORWARDED BROUGHT ON RECORDS AS BEING D ONE IN THE PRECEDING YEARS; DISCOUNTS OFFERED THROUGH BANK ACCOUNTS AND AFTER R AISING THE DEBIT NOTES TO BPTP WHEREBY THE CUSTOMERS GET THE FLAT/PLOT COST A DJUSTED BY THE DISCOUNT OFFERED; THE TARGET FOR REACHING THE SALES HAVING B EEN MADE THROUGH THE FAMILY MEMBERS. A PROPERTY DEALER OR ASSESSEE CAN FORWAR D MAXIMUM DISCOUNT TO HIS CUSTOMERS ON BOOKING OF BPTP PLOT/ FLAT TO ATTRACT MAXIMUM CUSTOMER TO ACHIEVE THE TOPMOST SLAB SO THAT MAXIMUM PERCENTAGE OF COMMISSION IS RECEIVED ON THE TOTAL VALUE OF EACH BOOKING. THE ASSESSEE GE TS COMMISSION FROM BPTP. LTD. THROUGH CHEQUES/DRAFTS AGAINST HIS BOOKINGS AN D FORWARD THE AMOUNT OF DISCOUNT THROUGH CHEQUES TO HIS CUSTOMERS DIRECTLY. THE ASSESSEE SUBMITS A DISCOUNT LETTER IN THE FORM OF DEBIT NOTE TO BPTP A ND BPTP CREDITS THE AMOUNT IN THE ACCOUNT OF THE CUSTOMER AND DEBIT TO THE ASSESS EE'S ACCOUNT. THE SAID AMOUNT IS ALSO CREDITED TO THE ACCOUNT OF CUSTOMER AGAINST THE DEMANDS IN FORM OF INSTALLMENT AND OTHER CHARGES, INTEREST FOR DELA YED PAYMENT, AGAINST AMOUNT OF THE RATE DIFFERENCE OF THE PLOT/UNIT ETC. THE AP PELLANT HAS FILED A COPY OF E MAIL DATED 08.08.2011 ENCLOSING THEREWITH THE LIST SHOWING THE FLATS/PLOTS BOOKED, DISCOUNT ALLOWED BY THE BPTP LTD AND DISCO UNT FORWARDED BY THE APPELLANT TO VARIOUS CUSTOMERS. ON CONSIDERATION OF AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, A FACTUAL ASPECT NEEDS T O BE ADDRESSED. IT IS REVEALED THAT BPTP HAS ALLOWED COMMISSION OF RS.2,72,325/- T O THE APPELLANT IN RESPECT OF BOOKING OF A PLOT NO. D-46 IN THE NAME OF MRS. URVA SHI AND COMMISSION OF RS.2,12,500/- IN RESPECT OF PLOT NO. D-43 IN THE NA ME OF SHRI ASHWANI SOOD. OUT OF THE COMMISSION OF RS.2,12,500/- RECEIVED FOR PLO T NO. D-43, THE DISCOUNT OF RS.1,88,250/- HAS BEEN FORWARDED IN THE BPTP LEDGER ON 31.03.2009 I.E. SUBSEQUENTLY WHICH REFERS TO TOTAL DISCOUNT ON THAT PLOT. THE AO HAS ACCEPTED THE FIGURES RANGING FROM RS.10,000/ - TO RS.50,000/ - WHICH ARE NOT IN RESPECT OF TOTAL CONSIDERATION BUT ON THE AMOUNTS SO PAID TILL THAT AMOUNT OF COMMISSION WAS RECEIVED. THUS THE AO HAS ERRED IN ESTIMATING T HE QUANTUM OF DISCOUNT FORWARDED BY THE APPELLANT. THE DISCOUNT FORWARDED AS PER THE RECORDS MADE AVAILABLE FROM BPTP RANGES FROM RS.20,000/- TO 2,7 2,325/- AND THIS IS A MATTER OF FACT WHICH CANNOT BE DISPUTED. SECONDLY, THE AO HAS TREATED THE DISCOUNT FORWARDED OF RS.35,03,883/- TO SHRI ASHISH IN RESPE CT OF ONE PLOT NO.D-36, WHICH IN NOT THE DISCOUNT FORWARDED BUT THE AMOUNT ACTUAL LY PAID TOWARDS THE INSTALLMENTS OF THIS PLOT THROUGH THE DISCOUNT FORW ARDED ACCOUNT. IT IS CLEARLY ESTABLISHED FROM THE NARRATIONS GIVEN IN THE LEDGER ACCOUNT WITH BPTP THAT THE INSTALLMENTS HAVE BEEN PAID TOWARDS THE COST OF SAI D PLOT INCLUDING LATE PAYMENT INTEREST ALSO. SIMILAR IS THE POSITION OF PAYMENT O F INSTALLMENTS TOWARDS PLOTS PAGE 6 OF 9 BOOKED IN THE NAME OF SMT. URVASHI, THEREFORE, THE AO HAS ERRONEOUSLY REFERRED TO THE SAID PAYMENTS IN THE NATURE OF DISCOUNT FORW ARDED FOR ONE PLOT ONLY, WHICH, OF COURSE, IS IMPOSSIBLE LOOKING TO THE MAXI MUM AMOUNT OF DISCOUNT EVEN ALLOWED BY THE BPTP. IN THE REMAND REPORT, THE AO H AS ADHERED TO THESE FACTS ONLY AND ASSERTED THAT DISCOUNT FORWARDED WAS IN RE SPECT OF ONLY THREE PLOTS INCLUDING SMT. POOJA. THE APPELLANT'S CONTENTION HA S BEEN THAT THE TOTAL COMMISSION RECEIVED FROM BPTP BY M/S. U.CHOUDHARY ESTATE ON ACCOUNT OF BOOKINGS DONE BY SHRI ASHISH WAS RS.46,05,972/- OUT OF WHICH RS.16,53,575/- WAS FORWARDED TO THE CUSTOMERS AS DISCOUNT BY WAY O F DISCOUNT FORWARDED AND OUT OF BALANCE, THE AMOUNT OF RS.27,07,172/- HAS BE EN GIVEN AS DISCOUNT FORWARDED TO SHRI ASHISH AS THE BOOKINGS WERE DONE BY HIM. THE COMMISSION RECEIVED FROM THE BPTP ON ACCOUNTING OF BOOKINGS IN THE NAME OF ASHISH GAHLAWAT WAS RS.7,96,762/-. THUS, IT WAS NOT ONLY O NE PLOT BUT SEVEN PLOTS BOOKED IN THE NAME OF SHRI ASHISH WITH BPTP AS PER THE FACTUAL ASPECTS EXAMINED. SIMILARLY, SMT. URVASHI HAS BOOKED FIVE P LOTS INCLUDING TWO IN HER NAME AS PER THE /DETAILS PROVIDED BY BPTP LTD. OUT OF TOTAL COMMISSION OF RS.8,84,266/ - RECEIVED BY THE ASSESSEE AGAINST THE BOOKINGS OF MRS. URVASHI GAHLAWAT FROM THE BPTP LTD., RS.7,05,000/- HAS BEE N GIVEN AS DISCOUNT FORWARDED. THE DISCOUNT OF RS.50,000/- FORWARDED TO SMT. POOJA IN RESPECT OF ONE PLOT IS NOT IN DISPUTE. THE ABOVE DETAILS HAVE BEEN RECEIVED BY THE ASSESSEE FROM BPTP ON 08.08.2011 THROUGH E-MAIL AND FILED BE FORE THE AO WITH A COPY MARKED TO THIS OFFICE BUT THE AO HAS PREFERRED NOT TO EXAMINE THESE FACTUAL ASPECT EITHER BY CALLING THE ASSESSEE OR BY CONDUCT ING ANY INQUIRY FORM BPTP BUT IGNORES THE SAID SUBMISSIONS. HAVING EXAMINED THESE FACTUAL ASPECTS, THE ONLY QUESTION THAT NEEDS CONSIDERATION IS THE APPLICABIL ITY OF THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. THESE PROVISIONS MANDATORILY REQUIRE RECORDING OF FINDINGS REGARDING INCURRING OF EXPENDITURE FOR THE PURPOSE OF BUSINESS, WHICH IN THE OPINION OF AO IS EXCESSIVE OR UNREASONABLE HAVING R EGARD TO THE FAIR MARKET VALUE FOR WHICH PAYMENTS IS MADE LOOKING TO THE LEG ITIMATE NEEDS OF THE BUSINESS OR THE BENEFIT DERIVED FROM THE EXPENDITUR E. IF THERE IS SOME CONNECTION OR NEXUS BETWEEN THE EXPENDITURE AND THE BUSINESS CARRIED ON BY THE ASSESSEE IT WOULD AMOUNT TO AN EXPENDITURE INCURRED IN THE COURSE OF BUSINESS AND FOR THE PURPOSE OF THE SAME. THE DISCOUNT FORWA RDED TO THE FAMILY MEMBERS BY THE APPELLANT HAS ALSO TO BE CONSIDERED IN THE L IGHT OF PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. THE AO HAS ALLOWED DEDUCTION FOR ADHOC AMOUNT OF RS.50,000/- ON IMAGINARY BASIS WHICH IS CONTRARY TO THE FACTS DISCUSSED ABOVE. IT REMAINS AN ADMITTED FACT THAT THE FAMILY MEMBERS OF THE APPELLANT HAVE UTILIZED THE ENTIRE BUSINESS SETUP, INFRASTRUCTURE, CLIENTEL E, CONTACTS, GOODWILL AND REPUTATION OF THE APPELLANT IN EARNING COMMISSION F ROM BPTP AND, THEREFORE, PAGE 7 OF 9 RETAINING MEAGER PART OF COMMISSION BY THE APPELLAN T IS NOT COMMENSURATE WITH THESE FACILITIES PROVIDED BY THE APPELLANT WHICH AP PEARS ONLY BECAUSE OF CLOSE RELATION. THOUGH THERE IS NO EFFECTIVE YARDSTICK FO R COMPARISON, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAVING REGARDS TO THE ABOVE DISCUSSION, I DEEM IT FAIR AND REASONABLE TO DISALLOW 25% .OF DISCOUNT FO RWARDED TO SHRI ASHISH AND SMT. URVASHI AS EXCESSIVE AND UNREASONABLE AND SUST AIN THE ADDITION TO THE EXTENT OF RS.10, 14,720/ -. CONSEQUENTLY, THE APPEL LANT THE GETS A RELIEF OF RS.30,44,163/-. GROUND NO.4 OF APPEAL IS PARTLY ALL OWED. 6.1. THE LD.SR.D.R. COULD NOT CONTROVERT THIS FACTU AL FINDING OF THE FIRST APPELLATE AUTHORITY. HENCE WE UPHOLD THE ORDER OF THE LD.CIT(APPEALS) AND DISMISS GROUND NO.1 OF THE REVENUE. 7. GROUND NOS. 2 AND 3 HAVE BEEN DEALT WITH BY THE LD.CIT(APPEALS) IN PARA 6.5 OF HIS ORDER WHEREIN HE HELD AS FOLLOWS: THERE IS NO DISPUTE TO THE FACT THAT THE APPELLANT HAS BEEN WORKING EXCLUSIVELY FOR BPTP LTD. AND HAS SHOWN ENTIRE COMM ISSION FROM IT. THE BPTP LTD. HAS PAID COMMISSION AND RECOVERED CERTAIN AMOUNTS AS PER THE DEBIT NOTE ISSUED. HENCE, IT IS NOT A CASE THAT THE APPELLANT HAS DIVERTED COMMISSION TO ANY OUTSIDE PARTY BUT IN FACT, THE AM OUNTS HAVE BEEN RECOVERED BY BPTP LTD. FROM THE ASSESSEE. AS EXPLAI NED IN THE BUSINESS PROCEDURES, EITHER THE ASSESSEE CAN EXTEND THE DISC OUNT DIRECTLY TO THE CUSTOMERS FROM HIS BANK ACCOUNT, WHICH HAS IN FACT BEEN DONE IN SEVERAL CASES AS REVEALED FROM THE COPY OF DISCOUNT FORWAR DED ACCOUNT OR CAN GET THE DISCOUNT AVAILED FROM THE BPTP. IN FORMER SITUA TION, THE ASSESSEE WILL GET MORE COMMISSION FROM BPTP LTD. AS COMPARED TO LATTER. THUS, WHEN BPTP LTD. HAS GIVEN THE COMMISSION TO THE ASSESSEE AND HAS ITSELF RECOVERED PART OF THE COMMISSION THROUGH RAISING D EBIT NOTES, THE GENUINENESS OF THE DISCOUNT FORWARDED CANNOT BE DOU BTED UNLESS IT IS ESTABLISHED THAT THE DISCOUNT FORWARDED TO BPTP LTD . WAS RECEIVED BACK BY THE APPELLANT IN SOME OTHER FORM. THE OBVIOUS IN FERENCE FROM THESE FACTS IS THAT THE ASSESSEE HAS RECEIVED COMMISSION FROM BPTP, AS INCLUDED IN THE TOTAL COMMISSION RECEIPTS, BUT AT THE TIME O F PAYMENT OF INSTALMENT OR INTEREST BY THE BUYERS/ CUSTOMERS, THE DISCOUNT HAS BEEN ALLOWED THROUGH BPTP INSTEAD OF GIVING DIRECTLY, FOR WHICH DEBIT NOTES HAVE BEEN RAISED BY BPTP LTD. THIS IS AS PER THE PREVAILING COMMERCIAL AND BUSINESS PAGE 8 OF 9 NORMS IN THE REAL ESTATE BUSINESS. IN PARA 4(C )(I) OF THE SUBMISSIONS DATED 26.03.2012, THE APPELLANT HAS SUFFICIENTLY EXPLAINE D THE CLAIM OF DISCOUNT FORWARDED WITH RELEVANT PARTICULARS/ EVIDENCES AND A COPY OF DEBIT NOTE RAISED BY BPTP DATED 25.06.2007 IN RESPECT OF DISCO UNT FORWARDED TO SHRI ROMEL NIJHAWAN IS FILED, WHICH REVEALS THAT THE AMO UNT HAS BEEN RECOVERED BY THE BPTP FROM THE APPELLANT. IT APPEAR S THAT THE AO HAS EITHER NOT LOOKED INTO THE LEDGER ACCOUNT NARRATION S PROPERLY OR HAS DRAWN HIS ADVERSE CONCLUSION DUE TO SHORT TIME AVAILABLE FOR PASSING THE ORDER. I FIND THAT THE AO HAS ALSO NOT GIVEN ANY ADVERSE FIN DING ON THIS ISSUE IN THE REMAND REPORT. EVEN OTHERWISE, LOOKING INTO THE TOTALITY OF THE FACTS, THE SUBMISSIONS OF THE APPELLANT AND REASONING ASSIGNED IN PARA 6.3 ABOVE, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE AND CONSEQUENTLY DELETED. 7.1. WE FIND NO INFIRMITY IN THESE FINDINGS. HENCE WE UPHOLD THE SAME AND DISMISS GROUND NOS. 2 AND 3. 8. GROUND NO.4 IS ON THE DISALLOWANCE U/S 43B OF TH E ACT. NO EXPENDITURE HAS BEEN CLAIMED BY THE ASSESSEE IN ITS BOOKS OF AC COUNTS. UNDER SUCH CIRCUMSTANCES THE QUESTION OF DISALLOWANCE U/S 43B DOES NOT ARISE. IN THE RESULT THIS GROUND OF THE REVENUE IS DISMISSED. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MAY,2014. SD/- SD/- (RAJPAL YADAV) (J .SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 21 ST MAY, 2014 *MANGA PAGE 9 OF 9 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR