- (1.) THESE three appeals under s. 260A of the IT Act, 1961 (hereinafter referred to as the "Act") are directed against the
(2.) THE appeals have been admitted on the following questions : "(1) Whether, on the facts and circumstances of the case, the Tribunal was legally justified in holding that the discount of Rs. 6,67,458 was actually given to the customers, when some of the supporting vouchers, which were test checked, were found to be forged. (2) Whether, on the facts and circumstances of the case, the Tribunal was legally justified in not discussing the evidence of the Government registered forensic expert, who had certified that some of the vouchers were forged and ignoring the law laid down on the admissibility of evidence by the apex Court in the case of Nawab Ganj Sugar Mills Co. Ltd. vs. CIT (1972) 86 ITR 44 (SC). (3) Whether, on the facts and circumstances of the case, the Tribunal was legally justified in accepting the contention of the assessee firm and admitting additional evidence, especially when in the appellate proceedings the assessee failed to appear before CIT(A), despite several opportunities, and whether the above action of the Hon'ble Tribunal was not in violation of r. 29 of the Income -tax (Appellate Tribunal) Amendment Rules, 1973. (4) Whether the Tribunal erred in law by allowing the assessee to project a new case even when these contentions had not been raised before the lower authorities and whether the above action of the Hon'ble Tribunal was justified in light of the observations of the apex Court in the case of Reckitt and Colman of India Ltd. vs. CCE (1977) 10 SCC 379. (5) Whether, considering the facts and circumstances of the case, the Tribunal erred in law by upholding the admissibility of expenses on the ground that the same were allowed in earlier years which is contrary to the law laid down by the apex Court in the case of CIT vs. Britsh Paints India Ltd. (1991) 91 CTR (SC) 108 : (1991) 188 ITR 44 (SC) that if accounting system does not disclose true and proper income the AO is entitled and has duty to adopt appropriate computation to determine true income."
(3.) THE brief facts of the case are that the respondent dealer was carrying on the business of tractors, motorcycles and their spare parts. It has given discount to its customer. Such discount has been disallowed by the assessing authority on the ground of certain discrepancies being found in some of the vouchers. Being aggrieved by the order, the assessee filed the appeal before the CIT(A). The CIT(A) upheld the disallowance of such discount. Being aggrieved by the order, the assessee filed the second appeal before the Tribunal. The Tribunal by the impugned order allowed the appeal and deleted the addition towards disallowance of such discount. The Tribunal held as follows : "We have considered the rival submissions. Regarding the first issue of disallowance out of expenses incurred on discount, the fact remains that the turnover of the assessee increased from Rs. 1,45,39,946 in asst. yr. 1989 -90 to Rs. 2,35,06,501 and similarly, the turnover has further increased in asst. yrs. 1991 -92 and 1992 -93 and in that proportion the claim of discount cannot be said to unreasonable and even if there is some increase in the amount of discount, it is everybody's common knowledge that the competition on account of introduction of number of companies selling tractors of various makes increased, therefore, the disallowance of payment of discount without appreciating the facts and circumstances obtainable in the nature of assessee's business cannot be upheld as such, particularly when the assessee filed complete list of persons to whom discounts were given even the AO gave full details including the date of payment, name and address of the customer, Bill No., cost of tractor, amount of discount paid and other details and the AO, without making proper enquiries, made the disallowance and the same has been confirmed by the learned CIT(A), for which there is no basis. There is also force in the contention raised on behalf of the appellant assessee that in the asst. yr. 1993 -94 on reduced sales, payment of discount at Rs. 2,14,535 has been allowed by the AO in the assessments made under s. 143(3). Similarly, the discounts were allowed in the past as per the information enclosed at p. 1 of the paper book. Merely because in some cases, the recipients of commission were not those persons who purchased the tractors or there was a change in signature on account of language and the appellant -assessee gave good account of nine instances taken into account by the AO out of 174 vouchers and on account of the same, almost entire discount could not be disallowed. Even the nine instances had properly been explained as to why there was discrepancy, 1994) made before him, has wrongly confirmed the amount of disallowance. Even if the amount of seven instances is taken into consideration, the amount is not even Rs. 30,000 even in view of the explanation, the same stands substantially explained, therefore, we have no hesitation in directing the AO to delete the entire amount of discount as the AO, under the similar circumstances, while passing orders under s. 143(3) for the asst. yrs. 1987 -88 and 1993 -94 has not made any such disallowances." Heard Shri D.D. Chopra, learned senior standing counsel for the Revenue. Despite the case being called twice, no one appears on behalf of the assessee.;