2018 (11) TMI 1877 - AT - Income Tax

Disallowing / adding taxpayer s discount and brokerage claim - CIT- A deleted the addition - HELD THAT - We invited attention to the fact that this tribunal has already reversed the CIT s action in assessment year 2011-12 seeking to disallow the very claim in sec. 263 proceedings. Learned co-ordinate bench s order to this effect 2016 (11) TMI 1700 - ITAT KOLKATA forms part of served before us. We are informed that Revenue s appeal against the same is pending before hon'ble jurisdictional high court. There is no distinction on facts or law pointed out at either parties behest in these two assessment years qua the impugned identical issue. We therefore adopt judicial consistency in this facts and circumstances to affirm the CIT(A) s findings under challenge deleting discount and brokerage disallowance -Decided against revenue.

Summary

Issues:
Appeal against disallowance of discount and brokerage claim of the taxpayer for assessment year 2008-09.

Analysis:
The Revenue's appeal in this case revolved around the disallowance of the taxpayer's discount and brokerage claim of ?21,83,16,311 during the assessment for the year 2008-09. The Assessing Officer had disallowed the claim, stating that the discounts offered by the taxpayer had already been deducted from the sales, making any further claim inadmissible. However, the taxpayer argued that different types of discounts were offered, such as trade discount, prompt payment discount, quantity discount, slab discount, and discount on sale of disposal of second tubes, which were accounted for separately in the profit and loss account. The taxpayer highlighted that the same accounting policy regarding discounts had been consistently followed in previous years, and the Assessing Officer had accepted this method. The taxpayer also referred to a previous decision by the Apex Court emphasizing the importance of maintaining consistency in accounting practices across assessment years. The Judicial Member observed that the Assessing Officer had taken a contrary stand in the current year without any change in material facts, leading to the deletion of the disallowance.

In response to the CIT(A)'s decision to delete the discount and brokerage disallowance, the Learned CIT-DR contended that the CIT(A) had erred in law and fact. However, it was noted that a previous tribunal decision had already reversed the CIT's action in a similar matter for the assessment year 2011-12. The tribunal's order in that case was cited as forming part of the record, with an appeal pending before the jurisdictional high court. No distinction in facts or law was identified between the two assessment years regarding the same issue. Therefore, in light of judicial consistency and the absence of any distinguishing factors, the tribunal affirmed the CIT(A)'s decision to delete the disallowance of ?21,83,16,311 for the current assessment year.

In conclusion, the Revenue's appeal against the disallowance of the taxpayer's discount and brokerage claim for the assessment year 2008-09 was dismissed, upholding the CIT(A)'s decision to delete the disallowance.