2013 (5) TMI 528

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.... The brief facts of the case are that during the course of assessment proceedings the AO observed that the assessee has provided some of its regular customers with discount. The AO observed that the said discounts were not debited in the discount account or directly against the receipts in the commission receipt account. The discount was debited to the sales promotion account. The AO observed that net balance of the sales promotion account was debited in the profit and loss account under separate head. The AO was of the view that payments of discount whether on the airline tickets or on Star Cruise bookings, was not entitled to be set off against commission receipts, since the net balance in the sub-ledger has already been debited to the pr....

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....,55,685/- was already debited to the sales promotion expenses and no further deduction was allowable in the commission. The ld. CIT(A) observed that on perusal of ledger account on sales promotion expenses which were actually the rebate/discount allowed by the appellant and on perusal of ledger account of Rs.26,673/- which was the amount of sales promotion expenses as per the profit and loss account he was of the view that the AO was not justified in holding that the assessee has already debited the sum of Rs.9,55,685/- in the profit and loss account under the head sales promotion expenses and therefore no deduction was allowable from the commission income. The ld. CIT(A) noted that the AO has not correctly appreciated the facts of the clai....