2022 (6) TMI 118

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....e engaged in the business of manufacturing, sale and export of sports goods. Assessee electronically filed its return of income for A.Y. 2015-16 on 29.09.2015 declaring income of Rs. 7,64,80,300/-. The case was selected for scrutiny and thereafter assessment was framed u/s. 143(3) of the Act vide order dated 27.12.2017 and the total income was determined at Rs. 9,53,27,308/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 16.08.2018 in Appeal No. 306/2017-18 granted substantial relief to the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: 1. "Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax ....

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....allowance of 50% of expenditure incurred by assessee owing to discount given to Indian customers without considering the fact that the assessee never furnished any tangible reason for providing such discounts only to the Indian customers and not over export sales. 5. That in the facts and circumstances of the case, the order of the Ld. Commissioner of Income Tax (Appeals) may be set aside and that of the AO be restored. 6. That the appellant craves leave to add, modify and/or delete any ground(s) of appeal." 4. The issue in all the grounds are with respect to the ad hoc disallowance made by AO namely with respect to the expenditure incurred from goods replaced, disallowance of expenditure on account of goods given to pl....

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....he extent of Rs. 44,74,763/- and directed the deletion of balance addition of Rs. 17,89,906/-. 7. AO on perusal of the profit and loss account noted that assessee had debited Rs. 2,97,05,172/- on account of discount given to Indian customers. It was submitted by the assessee that the discount was given to Indian customers for timely payment and achieving sale targets. The submissions of the assessee was not found acceptable to AO. AO had noted that assessee had not given any reason as to why this discount was given on Export sales. He accordingly held the 50% of the aforesaid discount amounting to Rs. 1,48,52,586/- to be not allowable and accordingly made its addition. When the matter was carried before CIT(A) CIT(A) noted that the custo....

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....hat the similar disallowance was made by AO in A.Y. 2013-14 and CIT(A) had granted relief to the assessee. The order of CIT(A) was not appealed by the Revenue meaning thereby that the order of CIT(A) attained finality. He further submitted that on identical issue the assessment for A.Y. 2016-17 & 2017-18 has been completed u/s. 143(3) of the Act and no addition has been made except for the 10% of amount spent on goods given to players for promotion of brands. He therefore submitted that considering the aforesaid facts, no interference with the order of CIT(A) is called for. 10. We have heard the rival submissions and perused the material available on record. The issue in all the above grounds is with respect to the ad hoc disallowance ma....