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Issues involved: Assessment of total income u/s 143(3) for AY 2008-09, difference in valuation of closing stock, applicability of section 43B for excise duty, addition of sales commissions paid to non-resident agents.
Assessment of total income: The assessee, engaged in manufacturing electronic equipment, filed return for AY 2008-09 showing income of Rs. 4,67,42,288. AO assessed total income at Rs. 5,87,15,732, noting a difference of Rs. 1,03,90,361 in closing stock valuation due to exclusion of excise duties. Valuation of closing stock: AO added the difference in closing stock valuation, as per books, to the total income. Assessee contended that excise duties were not accounted for in stock valuation. CIT(A) directed recasting of stock accounts to include excise duties as per section 43B, allowing deduction only on actual payment. Applicability of section 43B: Tribunal upheld CIT(A)'s order, citing section 43B which allows deduction for expenses only on actual payment basis. Confirmed that excise duty component in sales should be debited only to the extent actually paid to the Government. Sales commissions to non-resident agents: CIT(A) ruled that tax deduction at source (TDS) was not applicable on commissions paid to non-resident agents based on precedent. Tribunal dismissed revenue's appeal, following precedent decisions favoring the assessee. Conclusion: Tribunal dismissed revenue's appeal, upholding CIT(A)'s orders on both issues related to stock valuation and sales commissions to non-resident agents, based on legal provisions and precedents.
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