THE DY. CIT-1(1),, RAIPUR (CG) vs. M/S. ARUN TRADE COMBINES,, RAIPUR (CG)

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.119/RPR/2014 Assessment Year : 2010-11 DCIT- 1(1), M/s. Arun Trade Combines, Raipur (CG). 101, Deopuri, Mana Road, Vs. Raipur (CG).

PAN : AAIFA3199E (Appellant) (Respondent)

C.O. No.03/RPR/2014 (In ITA No.119/RPR/2014) Assessment Year : 2010-11 M/s. Arun Trade Combines, DCIT- 1(1), 101, Deopuri, Mana Road, Raipur (CG). Vs. Raipur (CG).

PAN : AAIFA3199E (Appellant) (Respondent)

Department by : Mrs. Anubhaa Goyal, DR Assessee by : Shri R. B. Doshi, CA : 07-08-2018 Date of hearing : 14-08-2018 Date of pronouncement O R D E R PER R. K. PANDA, AM : The appeal filed by the Revenue is directed against the order dated 09.04.2014 of CIT(A), Raipur (CG) relating to assessment year 2010-11. The assessee has filed the Cross Objection against the appeal filed by the Revenue.

2 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

For the sake of convenience, these were heard together and are being disposed

of by this common order.

“1. Whether in law and on facts & circumstances of the case the learned CIT(A) has erred in deleting the addition of Rs.77,57,000/- made by the A.O. on account of commission on sales especially when the entire commission expenses of Rs.77,57,000/- has been debited to the commission account on 31st March, 2010.”

engaged in the business of sale of tractors, earth moving machine accessories

and agricultural implements. It filed its return of income on 07.10.2010

declaring total income of Rs.28,42,686/-. During the course of assessment

proceedings, the Assessing Officer observed that the assessee firm has debited

an amount of Rs.77,57,000/- on account of commission on sales. On being

asked by the Assessing Officer to furnish the names and addresses of the

persons to whom such commission is claimed to have been paid, the assessee

filed the requisite details giving a list of 41 persons to whom commission on

sale had been paid by it during the year. The assessee also furnished details of

date-wise commission paid in each case giving the names of the person to

whom tractor was sold and amount of commission paid on each tractor sold by

it. In order to probe into the veracity of the assessee firm’s claim regarding

payment of commission, the Assessing Officer issued notice u/s 133(6) on

random basis to 10 persons. In the said letter, he asked them to furnish as to

3 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

whether they have rendered any service to M/s Arun Trade Combines. If the

answer is yes then to furnish the (i) nature of service rendered and whether any

such service has been rendered to any other person in the past or subsequent

year, (ii) total amount of money received from the assessee, (iii) mode of receipt

of money and copy of income tax return filed. Out of the 10 person to whom

such notices were issued only 7 persons responded to the letter issued u/s 133(6)

of the I.T. Act. However, 3 persons namely (i) Mr. Shayam Kumar Agrawal,

(ii) Mr. Sanjay Agrawal and (iii) Mr. Prakash Agrawal did not respond to the

letter issued u/s 133(6). From the replies received from the 7 persons, the

Assessing Officer noted that although the seven persons have admitted to have

rendered service to the assessee firm, however, none of them have given a

categorical reply regarding the nature of service rendered by them. This

according to the Assessing Officer is contrary to the elaborate details furnished

by the assessee in respect of payments of commission on the basis of tractor

sold. He further noted that the commission has been paid to each of the payee

in the form of advance on ad-hoc basis every month bearing no relation

whatsoever to the number of tractors sold. The vouchers produced by the

assessee do not mention the number of tractors, name of the buyer, sale amounts

on the basis of which the commission has been claimed to have been paid.

Further, all commission agents have set off such commission income against

4 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

various expenses and have declared meager income from commission and in

certain cases, some of the agents have claimed refund. He, therefore,

disbelieved the commission paid by the assessee as genuine. Further, the

assessee firm is selling the tractors of Mahindra & Mahindra company, which is

an established brand in the market and as such sells like hot cakes. Therefore, it

is highly improbable that the assessee firm would require to solicit the

prospective customers through commission agents. Rejecting the various

explanations given by the assessee and relying on various decisions, the

Assessing Officer held that the assessee failed to prove the genuineness of the

expenses claimed by it through payment of Rs.77,57,000/- paid to various

persons as commission on sale. He, therefore, disallowed the same and added

the same to the total income of the assessee.

the trade and buyers are mostly illiterate farmers/ villagers with limited buying

capacity and it becomes difficult to convince them to buy a particular product.

There are more than eight tractor suppliers in the city. Therefore, there is a

constant need to tap the prospective buyers after obtaining all data from the

village Sarpanch. Again contacting the buyers is also a difficult task as they

required to be contacted at odd hours like 7.00 AM to 8.00 AM and at remote

places. Therefore, in order to cater business, the assessee is forced to employ

5 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

persons after giving incentives to contact the prospective buyers at odd hours

and remote places. All necessary details were maintained and available and the

commission payments are verifiable and relatable to sales. Further, the

commission recipients are assessed to income-tax and the commission receipts

were duly reflected in their respective income-tax returns. Payments were made

through banking channels after making TDS and because of this, turnover of the

assessee also increased by 18% this year. It was further submitted that such

commission payment was accepted in regular assessment made in the preceding

assessment years. Relying on various decisions, it was submitted that the

disallowance made by the Assessing Officer is not justified.

CIT(A) deleted he said addition by observing as under :-

“3.3 I have gone through the observations of the A.O. and submissions of appellant. The undisputed facts in this respect are that the appellant is an authorized dealer of Mahindra & Mahindra make tractors. It has paid the above commission to different persons for promoting sales through banking channels after making TDS. During assessment proceedings in response to 10 notices issued, seven persons attended and confirmed the transactions. The commission receipts are also verifiable from Income-tax returns filed by the recipients. Having regard to the explanation of the appellant, I am satisfied that the appellant has established justification for commission payments. Such commission payments were examined in scrutiny/assessments in the past and were approved. The appellant has maintained all necessary details and the same are verifiable from and attributable to the sales made by the appellant. There is nothing on record which shows that the commission agents did not render service. As per appellant, there are eight other tractor dealers of different brands; hence the need of aggressive sales strategy by continuous persuasions cannot be undermined. The appellant has submitted comparative details of commission payments as per which the percentage of commission with reference to that of A.Y. 2008-09. It appears the A.O. was influenced by the fact of debiting of the expenditure at the end of the financial years. Some of the recipients also appeared to have not replied to the A.O.’s questions up to his expectation. Therefore, he inferred

6 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

that the claim of expenditure was not genuine. However, the A.O. could not develop any better case even at the remand report stage with reference to the submissions made by the appellant. In the case of A.C. Strips (P) Ltd. (supra), the Hon’ble Tribunal has deleted such disallowance in identical circumstances. Further since such claims of commission payments were accepted in regular assessments in the past and the A.O. cannot loosely deviate from the fundamental aspect permeating through different assessment years. The appellant has substantiated the claim of commission and has also proved genuineness thereof. In view of the above, I am of he considered opinion that the disallowance of Rs.77,57,000/- made by the A.O. is not justified and hence, deleted. This ground of appeal is, therefore, allowed.”

before the Tribunal.

that the assessee failed miserably to justify the genuineness of such commission

payments. She submitted that the entire commission has been debited to the

profit and loss account on the last date of the accounting year. Therefore, it is

nothing but to reduce the tax liability by paying the commission to different

persons. She further submitted that such commission has been paid to some of

the employees of the firm and family members of the HUF. Under these

circumstances, the order of the ld. CIT(A) should be reversed and that of the

Assessing Officer be restored.

of the ld. CIT(A). He submitted that the buyers are mostly farmers from rural

areas and are illiterate persons and, therefore, it is very difficult to convince

them. On the basis of information obtained from the Sarpanch of the villages

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about the need of the farmers, the commission agents contact the prospective

buyers. Since more than one visit is required to convince the buyers and most

of the time meeting with prospective buyers is fixed at odd hours early in the

morning, buyers being farmers some of the employees are required to contact

the prospective buyers. He submitted that this is a business necessity and

payment of such commission is in the nature of commercial expediency. He

submitted that since there are various dealers of different companies, it is very

difficult to survive in the business without following this method. He submitted

that 7 out of 10 commission agents against whom enquiry was conducted

admitted to have rendered services and such commission paid by the assessee

has been reflected by them in their respective returns of income. There is no

material on record to suggest that the agents have not rendered any services.

Such type of commission paid in the past year were allowed in the orders passed

u/s 143(3) for assessment year 2008-09 and 2009-10 and are placed in the Paper

Book pages 157 to 170. Relying on various decisions, he submitted that the ld.

CIT(A) has passed a speaking order while deleting the addition made by the

Assessing Officer. He accordingly submitted that the order of the ld. CIT(A) is

upheld.

perused the material available on record. We find the assessee, during the

8 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

impugned assessment year, has paid an amount of Rs.77,57,000/- to 41 persons

on account of commission on sale. We find during the assessment proceedings

the Assessing Officer had issued notice u/s 133(6) to 10 persons on random

basis out of which 7 persons have replied and confirmed to have received such

commission. However, the Assessing Officer disbelieved the genuineness of

such commission on the ground that none of the persons have replied regarding

the exact nature of services rendered by them although the assessee has given

voluminous vouchers giving the name of the persons to whom such commission

has been paid and the chassis number of tractors sold etc.. Further, according to

the Assessing Officer, such commission was paid to each of the payee in the

form of advance basis every month bearing no relation whatsoever to the

number of tractors sold. The vouchers produced by the assessee did not

mention the number of tractors, name of the buyer on the basis of which the

commission has been claimed. He, therefore, disallowed the entire commission

of Rs.77,57,000/-. We find the ld. CIT(A) deleted such disallowance the

reasons for which have already been reproduced in the preceding paragraph.

We find during the year the turnover of the assessee has gone up by 18% as

compared to the turnover of the preceding assessment year. Such commission

has been paid by account payee cheque and due TDS has been deducted and

most of the persons have reflected such commission as income in their

9 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

respective income tax returns. Further, such commission has been accepted in

the past assessment orders passed u/s 143(3) and no disallowance has been

made on such account. We, therefore, find merit in the argument of the ld.

counsel for the assessee that the Assessing Officer was not justified in

disallowing the entire commission expenses claimed by the assessee during the

year. However, it is also a fact that certain amount of commission has been paid

to close relatives of the assessee or the employees of the firm. Therefore,

considering the totality of the facts the disallowance of Rs.3,00,000/- on

estimate basis will meet the ends of justice. We, therefore, modify the order of

the ld. CIT(A) and sustain an amount of Rs.3,00,000/- on account of such

commission paid. The ground raised by the Revenue is accordingly partly

allowed.

assessee in Cross Objection read as under :- ITA No.119/RPR/2014 :

“2. Whether in law and on facts & circumstances of the case the learned CIT(A) has erred in deleting the addition of Rs.52,26,090/- made by the A.O. on account of Free Service expenses as the failed to establish genuineness of the expenses.” C.O. No.03/RPR/2014 : “In the facts and circumstances of the case, Ld. CIT(A) erred in confirming disallowance to the extent of Rs.5,00,000/- out of total disallowance of Rs.52,62,090/- made by the A.O. out of Free Service Expenses A/c. the disallowance sustained by the ld. CIT(A) is not justified.”

10 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

of assessment proceedings observed that the assessee has claimed an amount of

Rs.52,26,090/- as free service expenses. From the examination of the details

filed by the assessee, he noted that the assessee has paid on an average of

Rs.3250/- to each of the buyer of tractor as free services charge in lieu of 10 free

services. Since the assessee instead of giving any free services to any of the

buyer of the tractor made cash payment of Rs.3250/- to each of the buyer and

since the manufacturing company i.e. Mahindra & Mahindra has issued 10

coupons of Rs.80/- each in respect of each free service, the Assessing Officer

doubted the free service expenses claimed by the assessee and asked the

assessee to justify the same. He further noted that the assessee firm has got the

reimbursement of free service coupons amounting to Rs.16,00,685/- which has

been adjusted against the total free service expenses amounting to

Rs.68,26,775/- claimed to have been incurred on account of free services and

the balance of Rs.52,26,090/- has been debited to the profit and loss account.

Rejecting the various explanations given by the assessee and observing that the

assessee firm could not produce even a single voucher to support its claim

incurred to payment of free service expenses as claimed by it, the Assessing

Officer disallowed the entire amount of Rs.52,26,090/- to the total income of the

assessee.

11 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

farmers/ villagers from distant places and it becomes uneconomical for them to

bring their tractors for availing free service due to time and cost involved in

bringing the vehicles to the centers. Therefore, in order to meet out the

situation, the assessee used to reimburse Rs.3250/- at the rate of Rs.325/- per

free service for ten services. It was further stated that the manufacturers allow

only 8 free services. However, in the interest of business, the assessee allows

two additional services. It was further contended that the company reimbursed

Rs.250/- per service and not Rs.80/- as held by the Assessing Officer. Copy of

credit notes issued by the company was also filed. It was submitted that similar

expenses were incurred in the preceding assessment year and were allowed after

making minor disallowances. Hence, the present action of the Assessing

Officer is against rule of consistency. It was contended that the observations of

the Assessing Officer that the assessee did not conduct any free services is not

correct because out of 1623 tractors sold during the year, free services expenses

were reimbursed only to 1373 buyers and about 250 buyers availed free service.

It was also contended that there is no limit prescribed by the manufacturer for

free service expenses but reimbursement is made only at particular rate. The

assessee has maintained regular books of accounts which were audited u/s

44AB of the Act. No adverse comments were offered in this regard. It was

12 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

finally contended that the expenditure was incurred after considering various

practical aspects and was in the interest of business and prevailing trade

practice.

of Rs.5,00,000/- on estimate basis and deleted the balance amount by observing

as under :-

“4.3 I have gone through the observations of A.O. and submissions of the appellant in the course of appeal proceedings, the appellant filed copies of credit note, which substantiate reimbursement of free service expenses @ 250/- per service and not Rs.80/- as inferred by the A.O. The appellant is paying only Rs.75/- per service over and above that was reimbursed by the company. It is in lieu of actual service center expenditure that was to be incurred by the appellant against free service facility. It is trite law that assessee is the best judge of his business and the expenditure incurred by him in business interest cannot be disallowed without proving that the claim itself was not genuine. Copies of some of the vouchers filed with the written submission show that bill no. of the tractor sold and date are given and other details can be verified from the sale bill. The A.O. did not bring forth any evidences to support his view even during remand stage. The sales for the year under consideration have increased by about 18% and the GP rate has also increased from 4.18% to 4.23%. The appellant has maintained regular books of accounts, which are audited u/s 44AB. There are no significant adverse comments of the A.O. in his Remand Report. Under these circumstances, the disallowance made by the A.O. is not fully justified. However, looking to the nature and gap between the amount reimbursed by the manufacturing companies and the cash expenditure incurred in lieu of free services, the possibility of higher claim of expenditure cannot be ruled out. Accordingly, after considering the number of vehicles sold, the number of cases where cash payment made in lieu of free service coupons and the quantum of expenditure claimed, an amount of Rs.5,00,000/- is disallowed on estimate basis to meet the ends of justice. This appeal is, thus, partly allowed.

the assessee are in appeal before the Tribunal.

chart stating that if the version of the assessee and the CIT(A) are accepted that

13 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

the assessee was getting Rs.250/- per free service from the company as against

Rs.80/- as held by the Assessing Officer, even then an amount of Rs.41,96,140/-

is required to be confirmed as against Rs.5,00,000/- confirmed by the ld.

CIT(A).

order of the ld. CIT(A) to the extent he has given relief. He submitted that the 8

free services to buyers are allowed by the manufacturer. Since most of the

farmers are coming from distance places and it is difficult to bring their vehicles

to assessee’s service center, the assessee in order to continue loyalty of the

customers reimbursed at Rs.3250/- to each customer being 10 free services at

the rate of Rs.325/- for each service to the buyers who did not avail free

services. The expenditure has been incurred by the assessee on commercial

expediency. He submitted that the observation of the Assessing Officer about

reimbursement of Rs.80/- per free services by manufacturer is incorrect since

the reimbursement is Rs.250/- per service which is evidenced from the credit

notes issued by the manufacturer. Since the amount of reimbursement of

manufacturer is not sufficient to cover the actual expenditure, therefore, the

assessee paid Rs.325/- per free service charges to meet the cost. Further in the

past such free service charges claimed were allowed by the Assessing Officer

with insignificant disallowance. Therefore, there is no justification for

14 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

disallowing the entire expenditure during the year. He submitted that the entire

amount has been incurred by the assessee for commercial expediency and the

Assessing Officer cannot sit on the chair of the businessman and dictate the

assessee how to conduct his business. He accordingly submitted that no

disallowance is called for.

perused the material available on record. We find the assessee in the instant

case has claimed free service expenses of Rs.52,26,090/- after reducing the

amount of Rs.16,04,685/- being reimbursement of free services coupon from the

total free service expenses of Rs.68,26,775/-. We find the Assessing Officer

disallowed the entire expenditure on the ground that the assessee could not

substantiate the genuineness of such expenditure. We find the ld. CIT(A)

sustained an amount of Rs.5,00,000/- on estimate basis and deleted the balance

amount, the reasons for which have already been reproduced in the preceding

paragraph. It is the submission of the ld. DR that as per the computation filed

by her the disallowance comes to Rs.41,96,140/-. It is the submission of the ld.

counsel for the assessee that in the past such type of expenses were allowed

with minor disallowance. Further, the buyers of tractors are from distant places

and it is uneconomical for them to come to the premises of the assessee for

getting free services. Therefore, the assessee, to maintain good relationship

15 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

with them, reimburses the expenses to them so that they can get the free services

at nearby places. We find some force in the above argument of the ld. counsel

for the assessee. It is an admitted fact that in the immediately preceding

assessment year such free service expenses were allowed by the Assessing

Officer with some minor disallowance. In this year, the ld. CIT(A) has

disallowed an amount of Rs.5,00,000/- on estimate basis out of such free

services. The order of the ld. CIT(A), in our opinion, under the facts and

circumstances of the case is a reasoned one which, in our opinion, does not

require any interference. Accordingly, we uphold the same and the ground

raised by the assessee as well as Revenue are dismissed.

“3. Whether in law and on facts & circumstances of the case the learned CIT(A) has erred in deleting the addition of Rs.92,99,855/- made by the A.O. on account of other Insurance expenses as the assessee has filed to establish genuineness of the expenses.”

of assessment proceedings observed that the assessee firm has claimed an

amount of Rs.92,99,855/- on account of other insurance expenses. On being

questioned by the Assessing Officer it was explained that the same is on account

of reimbursement of insurance expenses in respect of tractors sold under the

scheme issued by the company for promotion of sale of tractors. The Assessing

Officer asked the assessee to furnish the literature in regard to the scheme

16 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

claimed to have been issued by the manufacturer company and that the assessee

was under obligation to follow it. Since the assessee could not file any such

evidence in support of this scheme under which the insurance expenses are

claimed to have been reimbursed to various buyers of the tractors and there was

no reference on the sale bill that reimbursement has been given to the buyers of

tractors, the Assessing Officer rejected the explanation given by the assessee

and made addition of Rs.92,99,855/- to the total income of the assessee.

target fixed by the company and to withstand pressure from the manufacturing

company to increase the sales and deemed from other local dealers, the assessee

was forced to give some offers to the customers. It was contended that such

offers were published in the newspapers on each and every day as common

features and it does not need separate justification. Referring to copies of

leaflets filed and newspaper advertisements, the assessee contended that it has

become an industry practice now. It was also contended that such benefits were

offered only to 972 vehicles sold out of total 1623 tractors sold during the year.

There cannot be any evidence from the manufacturer as it was the assessee’s

business decision. The leaflets, vouchers etc. were not readily available at the

time of assessment and the Assessing Officer gave only one day time to produce

the same and due to death of father of assessee’s counsel the same could not be

17 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

produced. The assessee contended that as per law laid down by the Hon’ble

Supreme Court in the case of S.A. Builders Ltd. vs. CIT (2007) 288 ITR 1(SC),

even when the expenditure may not have been incurred under any legal

obligations still it is allowable as business expenditure on the ground of

commercial expediency. The assessee contended that all the payments were

made through cheques issued in favour of the insurance company and

genuineness of the claim cannot be disputed. It was also contended that out of

total expenditure of Rs.92,99,855/- an amount of Rs.18,06,957/- relate to transit

insurance incurred by the assessee. It was also contended that such expenditure

incurred and claimed in the preceding years were allowed in regular

assessments. Hence, the present action of the Assessing Officer is not justified.

addition by observing as under :-

“5.3 I have gone through the observations of the A.O. and submissions of the appellant. The entire expenditure incurred under this head was undisputedly paid through cheques issued directly in favour of insurance companies. I have verified on test basis some of the entries in the bank statements also. So, there is no dispute regarding genuineness of the claim. Copy of the submission of the appellant was also forwarded to the A.O. for his comments. However, the A.O. has not contradicted the assertions of the appellant in his Remand Report. The appellant has successfully demonstrated before me that various schemes of offers were brought out by the appellant on its own and not by the manufacturer company and so they apprehension of the A.O. is properly explained. The aspect of incurring of such expenditure without any legal/contractual obligation is covered by the order of Hon’ble Supreme Court in the case of S.A. Builders Ltd. (supra). The copies of leaflets produced substantiate that the appellant has offered the scheme in general for the purpose of business promotion, accordingly, the claim of the appellant deserves to be allowed. In the Remand Report of the A.O. he has not doubted the genuineness of the leaflets. There is no material/evidence on record to controvert these evidences submitted by the appellant. This ground of appeal is, therefore, allowed.”

18 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

before the Tribunal.

submitted that the ld. CIT(A) without any valid reason has deleted the entire

addition which deserves to be set-aside and that of the order of the Assessing

Officer be restored.

order of the ld. CIT(A). He submitted that it is a matter of commercial

expediency and is a normal trade practice to offer such free insurance. He

submitted that the entire insurance amount has been paid by cheque to the

insurance company and the insurance papers are with the respective owners of

the tractors. He submitted that since the offer was made by the dealer,

therefore, there is no evidence to such scheme or offer from the manufacturer

company. Referring to copies of various offer leaflets placed at page 212 to 216

of the Paper Book, he submitted that the assessee has floated various schemes to

attract customers and such insurance charges has been paid for the first year as

commercial expediency. He submitted that there are around 8 dealers in the city

and the assessee has to compete with them to remain in business for which it

gives various offers from time to time. He submitted that the order of the ld.

CIT(A) is self-explanatory and, therefore, the same should be upheld.

19 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

perused the material available on record. We have also gone through the Paper

Books filed on behalf of the assessee. We find the assessee has claimed an

amount of Rs.92,99,855/- on account of other insurance expenses which was

disallowed by the Assessing Officer on the ground that the assessee firm was

not under any obligation to reimbursement of such insurance expenses and no

evidence regarding any scheme by the manufacturer company was furnished to

support its claim. We find the ld. CIT(A) deleted the addition, the reasons for

which have already been reproduced in the preceding paragraph. It is the

submission of the ld. DR that in absence of supporting evidences and in absence

of any obligation to incur such expenditure, the order of the ld. CIT(A) deleting

the addition is not justified. It is the submission of the ld. counsel for the

assessee that to attract the customers, the assessee has floated the scheme of

giving free insurance for the first year and it was not at the behest of the

manufacturer. Therefore, there is no question of giving any evidence to

substantiate that it was at the behest of the manufacturer. We find some force in

the argument of the ld. counsel for the assessee. From the various

leaflets/advertisements in newspapers, copies of which are placed in the Paper

Book, we find it is the assessee who has floated the scheme to attract the

customers and, therefore, there was no question of filing of any evidence to

20 ITA No.119/RPR/2014 C.O. No.03/RPR/2014

substantiate that such expenses were incurred on account of any scheme floated

by the manufacturer. Further, the amount has been paid by the assessee to the

insurance company through banking channels. It is also a normal trade practice

that usually the insurance charges for the first year is paid by various dealers to

attract the customers. Further, such free insurance expenses were allowed in the

part in scrutiny assessments. In our opinion, the order of the ld. CIT(A) in the

instant case is a reasoned one and does not call for any interference. We,

therefore, uphold the same and the ground raised by the Revenue is dismissed.

Cross Objection filed by the assessee is dismissed. Order pronounced in the open Court on this 14th August, 2018.

Sd/- Sd/- (SUCHITRA KAMBLE) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 14-08-2018. Sujeet Copy of order to: - 1) The Appellant 2) The Respondent 3) The CIT 4) The CIT(A) 5) The DR, I.T.A.T., Raipur. By Order //True Copy// Sr. Private Secretary ITAT, Raipur