Kala Vijayakumar, Chennai V. ACIT, Non Corporate Circle 9, Chennai

ITA 51/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7442 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M MATHIVANAN
• Assessee Lawyers: MUTHUKARUPPAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.51/CHNY/2018 ( / ASSESSMENT YEAR: 2009-10) SMT. KALA VIJAYAKUMAR, 401, PANTHEON ROAD, EGMORE, CHENNAI 600 008. VS THE ACIT, NON CORPORATE CIRCLE 9, CHENNAI 34. PAN: AEEPK6571L ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI MUTHUKARUPPAN, ADVOCATE / RESPONDENT BY : SHRI M. MATHIVANAN, ADDL CIT /DATE OF HEARING : 28.06.2018 /DATE OF PRONOUNCEMENT : 03.07.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI, DATED 29.09.2017 IN ITA NO.35/2011-12/CIT(A)-10 FOR THE ASSESSMENT YEAR 2009-10 PASSED U/S.250(6) R.W.S. 143(3) OF THE ACT. 2 ITA NO.51/CHNY/2018 2. THE ASSESSEE HAS RAISED TWO GROUNDS IN HER APPEAL HOWEVER THE CRUXES OF THE ISSUES ARE THAT:- (I) THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD.CIT(A) WHO HAD DIRECTED THE LD.AO TO DELETE THE DISALLOWANCE OF EXPENDITURE TO THE EXTENT WHICH IS NOT SUPPORTED BY BILLS AND VOUCHERS INSTEAD OF ALLOWING THE ENTIRE CLAIM OF EXPENDITURE AMOUNTING TO RS.5,73,685/-. (II) THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.3,14,496/- MADE BY THE LD.AO TOWARDS DISALLOWANCE OF DISCOUNT ON SALES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF GAS AGENCY FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ELECTRONICALLY ON 30.09.2009, ADMITTING TOTAL INCOME OF RS.26,04,960/-. INITIALLY THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT ON 19.11.2010 AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 01.09.2010. FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 21.12.2011 WHEREIN THE LD.AO MADE ADDITION OF RS.5,73,685/- TOWARDS REPAIRS 3 ITA NO.51/CHNY/2018 & MAINTENANCE FOR WANT OF BILLS AND VOUCHERS AND RS.3,14,496/- TOWARDS SALES DISCOUNT. 4. AT THE OUTSET, THE LD.AR SUBMITTED BEFORE US THAT AS PER THE DIRECTIONS OF THE LD.CIT(A), THE LD.AO HAD GRANTED RELIEF TO THE ASSESSEE WITH RESPECT TO DISALLOWANCE OF REPAIRS AND MAINTENANCE EXPENDITURE AMOUNTING TO RS.5,73,685/- AND THEREFORE THE FIRST GROUND RAISED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND ACCORDINGLY THE SAME MAY BE DISMISSED. WITH RESPECT TO THE ISSUE REGARDING SALES DISCOUNT THE LD.AR SUBMITTED THAT THE ASSESSEE HAD GRANTED DISCOUNT TO ITS CUSTOMERS AMOUNTING TO RS.3,14,496/- ONLY WHICH WORKS OUT TO APPROXIMATELY 0.25% OF THE TURNOVER OF RS.1,23,94,600/-. THE LD.AR FURTHER SUBMITTED THAT THE COMMERCIAL ESTABLISHMENTS, WHO PURCHASE CYLINDERS FROM THE ASSESSEE IN BULK, DEMAND FOR DISCOUNT AND IT IS A CUSTOMARY BUSINESS PRACTICE TO YIELD TO THEIR REQUEST IN ORDER TO BOOST THE SALE. HENCE, IT WAS PLEADED THAT THE ADDITION MADE ON ACCOUNT OF DISCOUNT OFFERED MAY BE DELETED. THE LD.DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE LD.REVENUE AUTHORITIES. 4 ITA NO.51/CHNY/2018 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. SINCE THE ASSESSEE HAS NOT PRESSED THE FIRST GROUND RAISED IN THE APPEAL WITH RESPECT TO DISALLOWANCE OF EXPENDITURE OF RS.5,73,685/- TOWARDS REPAIRS & MAINTENANCE, THE GROUND IS DISMISSED AS NOT PRESSED. WITH RESPECT TO THE OTHER GROUND RAISED BY THE ASSESSEE BEING DISALLOWANCE OF SALES DISCOUNT OF RS.3,14,496/-, WE FIND THE ARGUMENTS OF THE LD.AR TO HAVE MERITS. IT IS THE PREROGATIVE OF THE ASSESSEE TO OFFER DISCOUNT TO HER CUSTOMERS KEEPING IN VIEW OF THE COMMERCIAL EXIGENCIES. THE LD.REVENUE AUTHORITIES CANNOT SIT ON JUDGMENT WITH THE MANNER IN WHICH THE ASSESSEE HAD CONDUCTED HER BUSINESS. OFFER OF SALES DISCOUNT TO THE CUSTOMERS IS A GENERAL COMMERCIAL FEATURE EXISTENT IN COMMERCIAL TRANSACTIONS. FURTHER THE ASSESSEE HAS ONLY OFFERED A REASONABLE DISCOUNT TO HER CUSTOMERS WHICH WORKS OUT ONLY 0.25% OF HER TOTAL TURNOVER. IN THIS SITUATION, THE ADDITION MADE BY THE LD.AO TOWARDS DISALLOWANCE OF SALES DISCOUNT AMOUNTING TO RS.3,14,496/- WHICH IS FURTHER SUSTAINED BY THE LD.CIT(A) IS NOT JUSTIFIED. THEREFORE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF SALES DISCOUNT AMOUNTING TO RS.3,14,496/- IN THE HANDS OF THE ASSESSEE. 5 ITA NO.51/CHNY/2018 6. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 03 RD JULY, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 03 RD JULY, 2018 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF