TaxTMI 
TaxTMI 
2014 (6) TMI 250
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....ed for scrutiny and a notice u/s 143(2) was issued on 25.9.2009. During the course of assessment proceedings, the Assessing Officer observed that the assesse had declared gross commission receipts amounting to Rs.1,06,95,491/- (exclusive of service tax) from Business 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 discount 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 respect of one plot no. D-36, Sector 85, Faridabad and discount to his wife was in 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 Assessing Officer has disallowed Rs.40,58,883/- out of total discount forwarded of Rs.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 filing of return. The Assessing Officer has....
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.... 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 provisions 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.Counsel for the assessee and Shri Gagan Sood, Ld.Sr.D.R. on behalf of the Revenue. 5. On a careful consideration of the facts and circumstances of the case and perusal of papers on record, orders of the authorities below, we hold as under. 6. On ground No.1 the First Appellate Authority has admitted additional evidence and also called for a Remand Report. After considering the Remand Report the Ld.CIT(Appeals) concluded as follows:- "I have considered all the relevant material on this issue. The Assessing Officer has held that the assessee failed to substantiate his claim of discount forwarded to his family members while comparing with the cases of other custom....
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....ought through various marketing strategies; modus operandi of discount forwarded brought on records as being done in the preceding years; discounts offered through bank accounts and after raising the debit notes to BPTP whereby the customers get the flat/plot cost adjusted by the discount offered; the target for reaching the sales having been made through the family members. A property dealer or assessee can forward 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 gets commission from BPTP. Ltd. through cheques/drafts against his bookings and 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 and BPTP credits the amount in the account of the customer and debit to the assessee'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 delayed payment, against amount of the rate difference of the plot/unit etc. The appellant has f....
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....nd out of balance, the amount of Rs.27,07,172/- has been 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 one 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 plots 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 been 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 before 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 conducting any inquiry form BPTP but ignores the said submissions. Having examined these factual aspects, the only question that needs consideration is the applicability of the provis....
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....essee. As explained in the business procedures, either the assessee can extend the discount directly to the customers from his bank account, which has in fact been done in several cases as revealed from the copy of discount forwarded account or can get the discount availed from the BPTP. In former situation, 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 debit notes, the genuineness of the discount forwarded cannot be doubted unless it is established that the discount forwarded to BPTP Ltd. was received back by the appellant in some other form. The obvious inference from these facts is that the assessee has received commission from BPTP, as included in the total commission receipts, but at the time of 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 norms in the real estate business. In para 4(c )(i) of the submissions dated 26.03.2012, the appe....