TaxTMI 
TaxTMI 
1978 (9) TMI 91
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....et for the sales at 7 1/2 per cent on the net billing price of transpower gears and 5 per cent on the net billing price of shock absorbers on the total sales in the area allotted to the assessee. The agreement was in force for the period 1st Jan., 1973 to 31st Dec., 1973. According to the assessee, the intimation from the Bengal Auto Distributors stating that the assessee was entitled to a commission of Rs. 66,927.22 was received only with the letter dt. 4th Nov., 1974 and hence the amount was shown as the income for the previous year relevant to the asst. yr. 1975-76. The ITO was of the opinion that it related to the asst. yr. 1974-75 and he, accordingly, excluded the amount in computing the total income for the asst. yr. 1975-76. As a con....
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....and, it was contended on behalf of the Revenue that it was an attempt on the part of the assessee to shift the income from the asst. yr. 1974-75 to 1975-76 merely because the total income of the later year was much less and the impact of taxation could be reduced. It was submitted that the correspondence relied on by the assessee did not accord with normal business practices. It was also pointed out that the return of the assessee was filed on 12th Nov., 1974 after the receipt of intimation and nothing prevented the assessee from recomputing his total income for the asst. yr. 1974-75 as the taxability of the amount did not depend upon the manner in which the accounts were maintained by the assessee or any mistaken notion of the assessee as ....
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....f intimation by the Bengal Auto Distributors regarding the amount of bonus determined to be payable to the assessee. 8. The next question that arises is whether such determination was intimated to the assessee in the previous year relevant to the asst. yr. 1974-75 or in the previous year relevant to the asst. yr. 1975-76. The previous year relevant to asst. yr. 1974-75 is R.N. 2030 being the year ended 31st March, 74. According to the assessee no intimation of the determination of commissioner by Bengal Auto Distributors was received before the year ended 31st March, 1974. The assessee wrote a latter dt. 15th July, 1974, requesting for the credit note for the overriding commission and had received a reply dt. 30th July, 74 stating that the....
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....enable the assessee to benefit by shifting the income to the next year. Thirdly, the Revenue has not pointed out to any materials to indicate that the correspondence relied on by the assessee was not carried on in the ordinary course of business. In the circumstances, we are satisfied that the commission income of Rs. 66,927 accrued to the assessee only when it received the credit note with a letter of Bengal Auto Distributors on 4th Nov., 74. It follows that this amount was properly included in the total income of the previous year relevant to that asst. yr. 1975-76. Consequently, we hold that this amount should be added to the total income of the asst. yr. 1975-76 and the re-assessment adding to the total income of the asst. yr. 1974-75 s....
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....overnment was settled only when the amount was paid on 22nd June, 74. Reliance was placed on the correspondence with Government of Assam to show that the dispute was pending. On the other hand, the Revenue relied on the orders of the authorities below. 13. On a careful consideration of the rival submissions we are of the opinion that the assessee is entitled to succeed on this point also. We find that there is no dispute with regard to the fact that the assessee had paid this amount on 22nd June, 74 in this assessment year. However, as the assessee follows the mercantile system of accounting, the question is whether the expenditure accrued on that date. The assessee had relied on the correspondence with the Government of Assam which shows ....
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....0 to make an addition of Rs. 10,060 after disallowing the loss claimed. On appeal, the AAC was of the opinion that the addition was somewhat excessive and he reduced it to Rs. 5,000. 15. In the further appeal before us, it was contended on behalf of the assessee that in the past also losses had been accepted and the shortage in this assessment year could not be regarded as excessive compared to the shortage in the past. It was submitted that in the circumstances the addition should be deleted. 16. On the other hand, it was contended on behalf of the Revenue that there could not be any loss since the assessee was getting a rebate at the time of purchase for loss due to driage, dust etc. It was submitted that in the circumstances, the addit....