SMT. PURNIMA SAHOO,CUTTACK vs. ITO, ANGUL WARD, ANGUL

At the time of hearing, the AR of the assessee 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.

With regard to disallowance of discount and commission of Rs.15,40,933/-, 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

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 claimed 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 assessee 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

Ld. DR, on the other hand, vehemently argued that the CIT(A) was fully justified in confirming the order of the AO as the assessee failed to submit evidence with regard to the payment of discount and commission to the customers.

I have heard rival submissions and perused the order of lower authorities and materials available on record. In the instant case, the assessee claimed Rs.37,39,496/- 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.15,40,933.22 cash discount. The AO observed from the sale bill that the assessee has 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 disallowed the claim of the assessee 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 disallowance made by the AO.

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

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. The 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 30/11/2017. (N. S. SAINI) ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 30/11/2017 प्र.कु.मम/PKM, Senior Private Secretary