Transit damage discounts allowed as deductions when linked to the nature and extent of goods damaged.

Discounts granted to wholesalers in lieu of transit damage to goods were treated as deductible where the discount varied according to the nature and extent of the damage. The Tribunal applied its earlier view that such compensatory discounts represent an allowable deduction when they are linked to actual damage suffered during transit. On that basis, the disallowed discount in the present matter was held admissible, and the lower authorities' orders were modified accordingly.

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Issues: Whether discount allowed to wholesalers in lieu of damages caused to goods during transit, depending on the nature and extent of damage, was an allowable deduction.

Analysis: The Tribunal followed its earlier decisions holding that where wholesalers are granted discount to compensate for transit damage, and the discount varies with the nature and extent of the damage, the amount is deductible. Applying that view to the present case, the disallowed discount for damages was held to be admissible.

Conclusion: The discount for damages was allowable as a deduction and the orders of the lower authorities were modified to that extent, resulting in partial allowance of the appeals.

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