2018 (8) TMI 1419

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....icer completed assessment under section 250 of the Act on 31.01.2013 determining the total income of Rs. 11,66,730/-. 2. The facts are brought out by the Ld. CIT(A) at page 2 of his order. For the sake of brevity I do not extract the same. Suffice to say that the assessee, while accounting for purchases from Bharti Airtel Limited, has admittedly shows the commission of 4% due, as the cost of purchase. The Assessing Officer, by relying on the details of the transactions obtained from M/s. Bharti Airtel Limited under section 133(6) of the Act, computed the income of the assessee. As admittedly, neither the sales nor the purchases were properly accounted for by the assessee, he rejected the trading account submitted by the assessee and added ....

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....whereas purchases were taken on cash basis by the A.O., which is not correct. It was submitted that the purchase figure is inflated because, the commission paid by M/s. Bharti Airtel Ltd. in kind is included in the purchases. d. To Avoid complication item-wise profitability has been ascertained and submitted both before the Ld. A.O. as well as the Ld. CIT(A) which has not been properly examined. e. Commission of the earlier years has been included in the current year. 5. The Ld. DR, on the other hand, controvert the submissions of the learned counsel for the assessee and argued that: a. Admittedly the purchase figure has been inflated, as it included commission receivable by the assessee in kind. b. No evidence whatsoever was f....

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.... opinion that the valuation of closing stock has to be re-done by the Assessing Officer, by excluding the commission part from the total purchases. Coming to the other submission of the learned counsel for the assessee, it has not been demonstrated before me, that there are factual inaccuracies in the conclusions done by the Assessing Officer. Coming to the issue of the A.O. accounting for purchases a cash basis and for sales on accrual basis, we find that in this case, the commission in question accrues to the assessee at the point of purchase and is also received by the assessee in kind, at the point of purchases itself. It is another matter that this commission is realised by way of cash on sale of recharge vouchers. The claim of the ass....