Smt. Purnima Sahoo, Cuttack V. ITO, Angul Ward, Angul

ITA 219/CTK/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5325 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 01-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S N SAHU

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH CUTTACK BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER ./ ITA NO. 219 / CTK /20 1 7 ( / ASSESSMENT YEAR : 20 1 3 - 20 1 4 ) SMT. PURNIMA SAHOO, PROP - M/S. R ADHIKA BADABAZAR, TALCHER ORISSA VS. ITO, ANGUL WARD, ANGUL ./ ./ PAN/GIR NO. : A GLPS 3658 R ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI S.N.SAHU, AR /REVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 2 9 / 1 1 /201 7 / DATE OF PRONOUNCEMENT 30 / 11 /201 7 / O R D E R TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2 , BHUBANESWAR , DATED 23.02.2017 . 2. T HE SOLE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO DISALLOWING DISCOUNT & COMMISSION PAID RS.15,40,933/ - AND NON - DISCLOSURE OF CREDIT NOTES OF RS.15,401/ - . 3. AT THE TIME OF HEARING, THE AR OF THE AS SESSEE HAS MADE NO SUBMISSION ON THE GROUND OF NON - DISCLOSURE OF THE CREDIT NOTES OF RS.15,401/ - WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE, HENCE, THE SAME IS DISMISSED FOR WANT OF PROSECUTION. 4. WITH REGARD TO DISALLOWANCE OF DISCOUNT AND COMMISSION OF RS.15,40,9 33 / - , IT IS OBSERVED THAT THE AO HAS STATED THAT CASH DISCOUNT WAS BEING ALLOWED BY THE ASSESSEE TO THE CUSTOMERS ON THE BASIS OF SALE INVOICE THEMSELVES. HOWEVER, THE ASSESSEE HAS FURTHER CLAIMED CASH ITA NO. 219 /CTK/201 7 2 DISCOUNT SEPARATELY IN THE PROFIT AND LOS S ACCOUNT. AS THE ASSESSEE COULD NOT PRODUCE EVIDENCE REGARDING SEPARATE PAYMENT OF CASH DISCOUNT OF RS.15,40,933/ - , THE AO DISALLOWED THE DEDUCTION FOR THE SAME. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF AO. 5. THE AR OF THE ASSESSEE SUBMITTED THAT IN THE YEAR ENDED ON 31 ST MARCH, 2011, THE ASSESSEE HAD CLAIMED DISCOUNT AND COMMISSION OF RS.97,854/ - BY SALES OF RS.50,756,930/ - , WHICH WAS ALLOWED TO THE ASSESSEE. HE FURTHER SUBMITTED THAT IN THE ASSESSMENT YEAR 2012 - 2013, SIMILARLY THE ASSESSEE HAD CL AIMED DEDUCTION FOR DISCOUNT AND COMMISSION IN THE PROFIT AND LOSS ACCOUNT OF RS.14,34,572/ - , WHICH WAS DISALLOWED BY THE AO BUT ALLOWED BY THE CIT(A) IN I.T.APPEAL NO. 0009/2016 - 17, VIDE ORDER DATED 07.06.2017 AND FILED A COPY OF THE SAME IN THE PAPER BOOK AT PAGES 10 TO 13. HE FURTHER SUBMITTED THAT NO APPEAL WAS FILED THERE AGAINST BY THE DEPARTMENT AND THE ORDER HAS ATTAINED FINALITY. THUS, IT WAS HIS SUBMISSION THAT THERE WAS NO CHANGE IN FACTS IN THE PRESENT YEAR UNDER CONSIDERATION AND, THEREFORE, ON THE VERY BASIS OF THE SAME FACTS NO DISALLOWANCE OUT OF DISCOUNT AND COMMISSION OF RS.15,40,933/ - WAS WARRANTED. HE FURTHER ARGUED THAT IN THE ASSESSMENT YEAR 2010 - 2011, THE ASSESSEE HAD SHOWN NET PROFIT OF 0.66% AND IN ASSESSMENT YEAR 2011 - 2012 THE ASSESS EE HAD SHOWN NET PROFIT OF 0.59%, WHICH WAS ACCEPTED BY THE DEPARTMENT. HE SUBMITTED THAT IN THE YEAR UNDER APPEAL THE ASSESSEE HAS SHOWN NET PROFIT AT THE RATE OF 0.77% WHICH IS HIGHER THAN WHAT WAS ACCEPTED BY THE DEPARTMENT IN THE EARLIER ITA NO. 219 /CTK/201 7 3 ASSESSMENT YEA RS. THEREFORE, HE SUBMITTED THAT NO DISALLOWANCE UNDER THE HEAD DISCOUNT AND COMMISSION OF RS.15,40,933/ - WAS SUSTAINABLE. 6. LD. DR, ON THE OTHER HAND, VEHEMENTLY ARGUED THAT THE CIT(A) WAS FULLY JUSTIFIED IN CONFIRMING THE ORDER OF THE AO AS THE ASSESSE E FAILED TO SUBMIT EVIDENCE WITH REGARD TO THE PAYMENT OF DISCOUNT AND COMMISSION TO THE CUSTOMERS. 7. I HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDER OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED R S. 3 7,39,496/ - IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD DISCOUNT AND COMMISSION. THE AO OBSERVED THAT THE SAID AMOUNT WAS COMPRISED OF RS.21,98,563/ - CREDIT NOTES AND RS.15,40,933. 2 2 CASH DISCOUNT. THE AO OBSERVED FROM THE SALE BILL THAT THE ASSESSEE H AS ACCOUNTED FOR NET SALE I.E. SALES AFTER DISCOUNT ONLY AS IT SALES. THUS, THE DISCOUNT ALLOWED HAS ALREADY BEEN REDUCED FROM SALES. THE AO, THEREFORE, IN ABSENCE OF ANY EVIDENCE OF FURTHER CASH DISCOUNT GIVEN BY THE ASSESSEE DISALLOW ED THE CLAIM OF THE A SSESSEE OF RS.15,40,933.22. IN APPEAL BEFORE THE CIT(A), THE CIT(A) REQUIRED THE ASSESSEE TO FILE DETAILS ON DISCOUNT INVOICE - WISE AND BEFORE HIM THE ASSESSEE EXPRESSED ITS INABILITY TO FURNISH THE SAME. IN THESE CIRCUMSTANCES, THE CIT(A) CONFIRMED THE DI SALLOWANCE MADE BY THE AO. 8. BEFORE ME, LD. AR OF THE ASSESSEE FILED COPY OF PROFIT AND LOSS ACCOUNT OF THE PRECEDING ASSESSMENT YEAR 2012 - 2013 AND POINTED OUT THAT SIMILAR DISCOUNT AND COMMISSION CLAIMED AT RS.14,34,572/ - WAS ALLOWED IN THE ASSESSMENT OF THAT YEAR. I FIND THAT IN THE IMMEDIATELY ITA NO. 219 /CTK/201 7 4 PRECEDING ASSESSMENT YEAR 2012 - 2013 5% OF DISCOUNT AND COMMISSION WAS DISALLOWED BY THE AO WHICH WAS DELETED BY THE CIT(A) ON THE GROUND THAT THE DISALLOWANCE OF 5% WAS WITHOUT ANY MATERIAL OR BASIS. HOWEVER, I FI ND THAT IN THE YEAR UNDER CONSIDERATION THE DISALLOWANCE WAS NOT MADE ON ANY ESTIMATE BASIS BUT WAS MADE FOR ABSENCE OF EVIDENCE OR DETAILS. THEREFORE, THE FACTS OF THE INSTANT YEAR IS DISTINGUISHABLE FROM THE FACTS OF THE PRECEDING YEARS. THE ASSESSEE SUB MITTED BEFORE US THAT AFTER THE INVOICE IS RAISED FURTHER DISCOUNT IS ALLOWED TO BUYERS TO KEEP THEM IN GOOD HUMOUR AND SUCH FURTHER DISCOUNT ARE DEBITED IN THE PROFIT AND LOSS ACCOUNT. 9. I FIND FORCE IN THE ABOVE SUBMISSION OF LD. AR OF THE ASSESSEE. BUT IN ABSENCE OF FULL DETAILS THE ENTIRE PAYMENT OF CASH AND DISCOUNT CANNOT BE ACCEPTED. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, IN MY CONSIDERED VIEW, IT SHALL BE IN THE INTEREST OF JUSTICE TO ESTIMATE SUCH CASH DISCOUNT @1% OF THE SALE. T HE TOTAL SALE OF THE ASSESSEE DURING THE YEAR IS RS.6,94,94,474/ - , I THEREFORE, ALLOW DEDUCTION OF RS.6,94,944.74 AS CASH DISCOUNT AND CONFIRM THE BALANCE DISALLOWANCE OF RS.8,43,988.48. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 11 /201 7 . SD/ - (N. S. SAINI) / ACCOUNTANT MEMBER CUTTACK ; DATED 30 / 11 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY ITA NO. 219 /CTK/201 7 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE CO PY//