2019 (9) TMI 1508 - AT - Income Tax

Disallowance of rebate and discount - HELD THAT - As the amount of rebate and discount in respect of domestic sales is varying between 0.4% and 0.67%. It is, therefore, clear that the rebate and discount for the Asstt. Year 2012-13 by 0.30% is fitting in the order of things and there is nothing abnormal. Having regard to this factual matrix, we are of the considered opinion that there is no justification for the disallowance and the same is liable to be deleted. We direct the deletion of the same.

Summary

Issues:
Disallowance of rebate and discount in the assessment for the Asstt. Year 2012-13.

Analysis:
The Appellate Tribunal ITAT DELHI heard the appeal challenging the order of the Commissioner of Income-tax (Appeals) regarding the disallowance of rebate and discount in the assessment for the Asstt. Year 2012-13. The assessee, engaged in manufacturing and export, had debited an amount for rebate and discount, which was added by the Assessing Officer. The Commissioner of Income-tax (Appeals) observed two components of the disallowance, one for export sales and the other for domestic sales. The disallowance related to domestic sales was confirmed due to lack of proper documentation provided by the assessee. The assessee argued that regular audited books of accounts were maintained, and similar deductions were accepted in previous and subsequent assessment years. The Department argued that despite opportunities, the assessee failed to provide necessary evidence. The Tribunal noted that a significant portion of the disallowance related to export sales was deleted by the Commissioner after verification. However, the disallowance related to domestic sales was upheld due to the absence of vouchers. The Tribunal considered the historical data of rebate and discount percentages for previous years, which were accepted during assessments. The variation in rebate and discount percentages for different years was deemed normal, and the Tribunal found no justification for the disallowance in the Asstt. Year 2012-13. Consequently, the Tribunal directed the deletion of the disallowance related to domestic sales, allowing the appeal of the assessee.