2005 (7) TMI 538

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.... Rs. 90,82,297. 2. We have heard the rival submissions and carefully perused the orders of the authorities below and documents placed on record. 3. Briefly stated, on examination of the case records, we find that it was noticed by the CIT, that the assessee has claimed a sum of Rs. 90,82,297 being deferred revenue expenditure. Out of Rs. 90,82,297, a sum of Rs. 62,81,806 were spent for commission and incentive. Having observed that commission/incentive is normally paid after the sales and not paid in advances, the CIT observed that the Assessing Officer has wrongly allowed the entire claim of Rs. 90,82,297 which were claimed to be deferred revenue expenses without proper investigation. He, accordingly, issued a show-cause notice under....

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....enses were also furnished before the Assessing Officer. The assessee has also explained to the Assessing Officer that these incentives and discounts were claimed on actual sales and not on account of advances. Through his letter dated 22nd February, 1999 the learned counsel for the assessee has explained that all these incentives and discounts debited to revenue expenditure, are basically incurred for the incentive and discounts on sales through various RSAs. In normal course of business, it is not possible for the assessee to sale its ayurvedic products all over India unless there is a wide spread marketing of its products. Thus, incentives and discounts are offered to such middlemen who are the Linkage between the assessee's products and ....

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.... & Investment Co. (P.) Ltd. v. ITO [1993] 45 ITD 399 4. Dewas Silk Mills v. CIT [2005] 143 Taxman 38 (Indore) (TM) (Mag.) 5. Eureka Sales Corpn. v. Asstt. CIT 1 SOT 490. 6. The learned counsel for the assessee further invited our attention to the following judgments in support of his contention that mere lack of discussion of the issue in the assessment order would not render that the said assessment order erroneous merely because the Assessing Officer does not meticulously deal with the issues : 1. Indian Hotels Co. Ltd. v. Dy. CIT 68 TTJ (Mum.) 706 (sic) 2. CIT v. Goyal (P.) Family Specific Trust [1988] 171 ITR 698^1 (All.) 3. Sunil Lamba v. Dy. CIT [2003] 131 Taxman 35 (Delhi - Trib.) Th....

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..... Smt. D. Valliammal [1998] 230 ITR 695 (Mad.). 7. The learned DR on the other hand has placed reliance upon the order of the CIT and also invited our attention to the fact that the assessee did not file complete details before the Assessing Officer, as such, the CIT was justified in setting aside his order. 8. Having carefully perused the orders of the lower authorities and the aforesaid judgments referred to by the assessees, we find that during the course of the assessment proceedings, the assessee has claimed the deductions of all these expenses which were claimed to be deferred revenue expenses in the P & L account prepared for the purpose of Companies Act. During the course of the assessment proceedings, in response to query rai....