2019 (9) TMI 200

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....hether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition under section 40(a)(ia) rw section 194H of the Act amounting to Rs. 5,84,55,165/-?' 3. The Respondent is engaged in the manufacture of Ayurvedic medicines. During the assessment proceedings for the subject Assessment Year the Assessing Officer noted that on the sales turnover of Rs. 14.25 crores the Respondent had given discount of Rs. 7.27 crores. The Assessing Officer called upon the Respondent to furnish details of the discount given. In response the Respondent pointed out that it was selling its Ayurvedic medicines to a Company called M/s. Sandu Brothers Private Limited (SBPL) at a discount @ 51%. This after taking....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... on record that assessee entered into an agreement with SBPL on 1st April 1997, for sale of its products. As per clause 1 of the agreement, assessee is to manufacture and process certain Ayurvedic drugs and formulation by utilising the secret formulation given by SBPL and pack them in bulk or in such other pack as may be stipulated or specified by the SBPL to enable them market the same by buying the said products on its account. Clause-11 of the agreement , stipulates that the sale of goods to SBPL are on principal-to-principal basis and none of the parties to the agreement shall hold oneself as agent of other under any circumstances. It further stipulates that SBPL shall sell the products on its own account only and not as an agent or on ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....also relevant to note, though, the agreement with the SBPL is subsisting from the year 1997 and similar trade discount has been given to SBPL on sale effected over the years, the Department has not made any disallowance either in the preceding assessment years or in the subsequent assessment years. This fact is evident from the assessment orders passed for assessment year 2005-06 and 2006-07 under section 143(3) of the Act, copy of which have been placed on record. That being the case, when the Department is following a consistent view by not treating the discount given to be in the nature of commission over the years under identical facts and circumstances, a different approach cannot be taken in the impugned assessment year.' 6. From t....