TaxTMI 
TaxTMI 
2019 (1) TMI 1390
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....total income at Rs. 11,61,16,414/- which was revised on 30th January, 2008, showing total income of Rs. 13,05,52,249/-. In the assessment proceedings, the Assessing Officer asked the assessee to reconcile the receipts as per profit and loss account and as per TDS Certificates. The assessee submitted reconciliation chart as under : Particulars Total Income as per ledger TDS forms deposited TDS @5.61% Air passage 36,54,53,749 2,07,11,980 2,05,01,855 Add: Rail income/Brokerage 11,64,763 Total Commission (Air passage) 36,66,18,511 Less: Discount Allowed/Handling Charges 22,68,03,687 Net Income as per Annexure A 13,98,14,824 2,07,11,980 2,05,01,955 3. From the above reconciliation chart, it was noticed that the assessee has debited Rs. 22,68,03,687/- towards discount allowed/handling charges. The assessee was asked to explain the same. In response, the assessee submitted that he had received 5% commission from airlines and 3% is passed on to the customers for whom the tickets were booked. The Assessing Officer further noticed that assessee received basic commission ....
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.... reiterated the submissions made before the CIT (A) and relied on the same. It was further submitted that all the documents were provided before the Assessing Officer but he has not pointed out any mistakes therein. Books of accounts have been audited by qualified chartered accountant. No adverse remarks have been given by him. The Assessing Officer has accepted the books of accounts. Therefore, the Assessing Officer was not justified to make the impugned additions. 8. After hearing both the sides and perusing the entire materials available on record, we find no infirmity in the order of the CIT(A). The findings reached by learned CIT(A) are as under : "6.7 On careful consideration of the facts, I find that the Ld. AO has taken incorrect facts relating to various types of discounts/ handling charges received/passed on. The details filed show that the appellant has out of the total commission including overriding commission and productively link bonus aggregating to Rs. 36,54,53,748/-, passed on a sum of Rs. 22,13,91,984/- as discount/handling charges to the customers as follows:- S. No. Description of transactions Amount received Discount/ handling charge....
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....ickets and distributes them to all agents. (ii) Agents issue tickets to passengers and send audit coupons to the BSP. (iii) The BSP captures the information from these audit coupons and prepares a billing statement which clearly reflects the gross/published fare, standard IATA commission paid to agents as well as the supplementary commission. The net fare payable by the travel agent to the assessee-airlines is also reflected in the billing statement. (iv) The travel agent then pays a single cheque to IATA/BSP for tickets sold on behalf of various assessee-airlines, who then distribute the money received to respective assessee-airlines. It is not disputed that each billing analysis received from the BSP contains the following details: (a) The name of the agent; (b) Identification number of the tickets sold; (c) Gross value of the tickets sold (d) Standard commission or the IATA commission payable to travel agent, and (e) The supplementary commission, which is the difference between the gross fare, net fare, taxes and standard commission payable to the travel agent." 6.9 I find that in reaching ....
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....verified by me in the presence of the AR of the appellant company and the Ld. Counsel. Certain client-wise bills were identified on which, detailed explanation of the appellant regarding the basis for extending discount was given, which was duly verified and was found in order, taking into account, the relevant invoices, ledger account and the relevant agreement. 6.11 On careful consideration of the above, in the light of the above evidences, I hold that the claim of the appellant is in accordance with the books of account regularly maintained by it and based on the method of accounting being consistently followed by it and no infirmity is observed therein. The appellant has been passing on a part of basic Discount and overriding discount to its clients. This is evident by the agreement, client ledger account, invoices and BSP settlement. While basic discount is always passed on to the customers, ORC, which is made available to it by Airlines in case of specific deals only, is also shared with customers. Therefore, the Ld. AO's finding in this regard is not based on the prevalent market practices as acknowledged by the Hon'ble Delhi High Court in the case of CIT vs....