TaxTMI 
TaxTMI 
2013 (8) TMI 973
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....eard together and are being disposed of by a consolidated order for the sake of convenience. 3. First, we take up the Revenue's appeal, i.e. ITA No.201/Ahd/2013 pertaining to Asst.Year 2008-09. The Revenue has raised the following grounds of appeal:- 1) The Ld.CIT(A) has erred in law and on facts in deleting the disallowance of turnover discount of Rs. 18,09,950/- given to it's associate company M/s.Bharat Pesticides Inds.Pvt.Ltd. without appreciating the fact that the assessee company had not received any turnover discount from the said company on the sales made by the associate company to the assessee company and the scheme had been specially made to ensure undue benefit to the related party. 2) The Ld.CIT(A) has erred in law and on ....
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....in the case of United Exports vs. CIT 350 ITR 549 (Delhi). He also relied on the decision of Hon'ble Apex Court rendered in the case of CIT vs. A.Raman and Co. 67 ITR 11(SC). He submitted that the Hon'ble Apex Court has held that law does not oblige a trader to make the maximum profit that he can out of his trading transactions. He submitted that the Hon'ble Apex Court has also held that avoidance of tax liability by so arranging commercial affairs that charge of tax is distributed is not prohibited. A Taxpayer may resort to a device to divert the income before it accrues or arises to him. Effectiveness of the device depends not upon considerations of morality, but on the operation of the Income-tax Act. Legislative injunction in taxing sta....
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....early stated that customer effecting turnover of above Rs. 7 crore was eligible for discount @ 2.5% on sales and accordingly the same is given to M/s.Bharat Pesticides Industries Pvt.Ltd. as per Credit Note dated 31/03/2008 issued by the Appellant Company. It is further submitted that the returned income of M/s.Bharat Pesticides Industries Pvt.Ltd. is Rs. 67,41,180/- for A.Y. 2008-09 which means that the said company is assessable at the same rate of tax (Maximum rate for companies) as the Appellant Company and there cannot be any loss of revenue involved in this case. The appellant has stated that appellant Company has given turnover discount i.e. trade discount of Rs. 18,09,950/- which is by way of reduction in the sale price to the purch....
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....rty M/s.Bharat Pesticides Industries Pvt.Ltd. is not found reasonable and has disallowed an expenditure in the hands of the assessee being reasonable and excessive. However, the AO has not specifically mentioned the provisions of section 40A(2)(b) but such disallowance to be made u/s.40A(2)(b) of the Act. The Hon'ble Apex Court in the case of CIT vs. A.Raman and Co. has held that the law does not oblige a trader to make the maximum profit that he can out of his trading transactions. Avoidance of tax liability by so arranging commercial affairs that charge of tax is distributed is not prohibited. A Taxpayer may resort to a device to divert the income before it accrues or arises to him. Effectiveness of the device depends not upon considerati....
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....nd was wrongly raised, therefore the same is rejected. 8. Ground Nos.3 & 4 are general in nature which require no independent adjudication. 9. In the result, Revenue's appeal for AY 2008-09 is dismissed. 10. Now, we take up the Revenue's appeal, i.e. ITA No.202/Ahd/2013 for AY 2009-10. In this appeal, the Revenue has raised the following grounds:- 1) The Ld.CIT(A) has erred in law and on facts in deleting the disallowance of turnover discount of Rs. 42,41,138/- given to it's associate company M/s.Bharat Pesticides Inds.Pvt.Ltd. without appreciating the fact that the assessee company had not received any turnover discount from the said company on the sales made by the associate company to the assessee company and the scheme had been spe....
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....ng the year under consideration, on verification of the depreciation chart. noticed that there is addition on the gross to the gross block under the head vehicles to the tune of Rs. 39,00,000/-. On verification of the details filed by the assessee in respect of the addition to fixed asset, it is noticed that the assessee had purchased a Swift Car for Rs. 5,49,500/- on 31.3.2009. Therefore the assessee was asked to give the details of put to use of the said vehicle and also the details of the expenses incurred towards petrol/diesel, etc. In this regard, it was submitted by the assessee that dealer had provided reasonable quantity of free diesel at the time of delivery which was self-sufficient to use the car for the day. This explanation has....