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TMI Blog2013 (3) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... as existing in the said statutory provisions?" 2) The question pertains to the inclusion or otherwise of trade discount offered by the assessee to its dealers for the purpose of computing deduction under section 80HCC of the Act. Counsel for the appellant drew our attention to the impugned common judgment of the Tribunal, wherein in order to decide this issue against the assessee, the Tribunal relied on its previous order dated 27.7.2000 in case of this very assessee for the earlier assessment year 1992-93. Counsel pointed out that such decision of the Tribunal was carried in appeal by the assessee before this Court in Tax Appeal No.259 of 2000. This Court had allowed such appeal by judgment dated 31.7.2012, making following observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at on any bill outstanding beyond period of 30 days, no discount would be paid. Thus, the scheme framed by the assessee related the discount to two factors viz. the sales effected by the dealer and to the prompt payments of periodical bills. 14) Keeping the above background in mind, we may try to ascertain whether such discount should form part of the total turnover. The term turnover has not been defined under the Income Tax Act or for that matter under Section 80HHC of the Act. The Central Sales Tax Act, 1956 defines term "turnover" in Section 2 (j) of the Act as under: Section 2(h) in turn defines term "sales price" as under: (h) "sale price" mean the amount payable to a dealer as consideration for the sale of any goods, less any sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods as reduced by any sum allowed as cash discount according to the prevailing practice in the trade, but inclusive of certain specified items. 16) Before the Apex Court in case of The Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Vs. M/s. Advani Coorlikon (P.) Ltd. reported in AIR 1980 SC 609 these definitions came up for interpretation. The question was whether a trade discount as opposed to a cash discount could form part of the turnover. The Apex Court noted that under clause 2(h) it was only the cash discount which would be excluded from the sale price. The Apex Court also noted that there was clear distinction between the trade discount and cash discount. Despite this, it was held that: "It is true that no deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er receive could not form part of the turnover. 18) In the decision in case of M/s. Advani Coorlikon (P.) Ltd. (supra) the Apex Court distinguished the facts in case of India Pistons Ltd. Vs. State of Tamil Nadu reported in 1974 33 STC page 472. We also perused the such decision. It was a case wherein the assessee had offered trade discount to its dealers on the sales effected. Such discount offered was in form of a credit to be reflected in the account of the dealer. Such credit could be used by the dealer only for the purpose of making laser purchases from the assessee. It was in this background the Division Bench of Madras High Court held that such discount cannot be excluded from the computation of turnover for the purpose of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover of sales for a period in the present case, the previous year relevant to the assessment year 1990-91, in its ordinary sense denotes the aggregate of price received or receivable by the company in respect of sale of goods transacted by it. No other specific meaning has been assigned to it. If sale of goods is to be understood as defined in the Sale of Goods Act, the price received/receivable becomes an integral part of the sale transaction." 20) We also notice that in case of Union of India and ors. vs. Bombay Tyres International (P) Ltd. reported in (2005) 3 SCC 787 in context of valuation for the purpose of collection of excise, the Apex Court observed as under: "3(1) Trade discounts:- Discounts allowed in the trade (by whateve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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