TaxTMI 
TaxTMI 
2025 (11) TMI 743
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....AC, New Delhi (hereinafter 'Ld. CIT(A)') 2. The grounds of appeal raised by the Revenue are as under: - "1. Whether the Ld. CIT(A) has erred in deleting the addition of Rs. 4,90,69,253/being expenses on Rebate and Discount, when such Rebates and Discounts are no verifiable from the bills to the customers and not proved to have incurred wholly and exclusively for the purpose of its business. 2. Whether the Ld. CIT(A) has erred in deleting the addition of Rs. 33,18,161/-under the head 'Advances and Deposits Written Off' which is an excess payment of royalty to its holdings company which is only a transfer of profit. 3. Whether the Ld. CIT(A) has erred in deleting the addition of Rs. 8,00,000/-which is an ....
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....hat the said rebate & discount claimed to have been paid, in aggregate, to the AE was not actually passed to the customers and thus, he disallowed the same on the reasoning that the same had not been incurred wholly and exclusively for the business purposes of the assessee. The Ld. AO further opined that the payment of rebate & discount through the holding company AE was nothing but a mechanism to transfer the profit in the garb of rebate & discount to the holding company AE. Besides, the Ld. AO also made disallowance/ addition of Rs. 41,18,161/- as under: "Assessee has debited advances and deposits written off to the P&L account. Vide letter dated 18.12.2018, assessee was asked the following: "Show cause why the expense o....
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....y passed on to its customers through its AE. The agreement/MOU entered between holding company AE and the assessee, being self-serving document, did not demonstrate that the said rebate & discount had been actually passed on to the customers through the AE. Thus, the assessee could not establish that the said rebate & discount had been incurred wholly and exclusively for the business purposes. The Ld. Sr. DR placed reliance on the decision of the Tribunal in the case of the assessee in ITA No.3158/Del/ 2023. Further, it was also submitted that there was no tripartite agreement or third-party document justifying the assessee's claim that the said rebate & discount had been passed on to the customers of the assessee. The Ld. Sr. DR drew our a....
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....submitted that the said rebate & discount had been paid as per the agreement between the assessee and its AE, which, later on, passed on to the foreign customers through MOUs between the AE and customers. The Ld. AR drew our attention to the said agreement/MOU. The Ld. AR drew our attention to the categorical finding of the Ld. CIT(A) that 'this year case was different than the preceding year and the documentary evidences on record also favour the contentions of the appellant. I find force in the evidences provided by the appellant.' However, the Ld. AR did not place any documentary evidence before us to buttress the finding of the Ld. CIT(A). 7. We have heard both parties at length and have perused the material available on the record. ....