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TMI Blog2018 (2) TMI 1773X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of Rs. 5418000/- made by AO on account of advance commission received in its P&L A/c. 2. That the order of the ld CIT(A) is erroneous and is not tenable on facts and in law. 3. That the grounds of appeal are without prejudice to each other." 3. Based on the above grounds of appeal it is apparent that the revenue is aggrieved disallowance made by the Ld. assessing officer of Rs. 5 418000/- on account of advance commission received in its profit and loss account deleted by the Ld. CIT (A). 4. The assessee is a company who filed its return of income on 1/10/2010 at Rs. 159378240/-. The assessment under section 143 (3) of the act was passed on 26/3/2013 at Rs. 164905648/-. The major addition made by the Ld. AO was with respect to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heless, the supplier issues a credit note of commission in respect of the entire material, including goods in transit, which are not received by the appellant during the financial year or at the end of the financial year. The appellant reduces the commission on the purchases by the amount of commission on which the material is not actually received and this amount is taken to the head other liabilities in the balance sheet. When the purchases are recorded in the next financial year on account of material, being physically received, the corresponding commission on such purchases is credited to purchase account in that year. Assessee further submitted the copies of the account and simple invoices to show the above details. Ld. CIT (A) has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted the same arguments which were submitted before the Ld. Assessing Officer and the Ld. CIT Appeal. It was further stated that the goods have been received in subsequent year and booked as purchases in the subsequent year therefore; commission linked with that is also to be accounted for in that year. Alternatively it was further stated that the assessee is a company which is charged to tax in both the years at similar rate of taxation and merely because the income even if offered in the subsequent year or this year there is no loss to the revenue. It was further stated that Hon'ble Supreme Court in case of Excel industries has reiterated the same principle. In view of this, it was submitted that on the merits, the case of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received the right to receive such commission rests with the assessee. It could also not be pointed out by the Ld. assessing officer or the Ld. departmental representative that any such adjustment or addition has been made in the hands of the assessee in subsequent years or in earlier years. Therefore it is apparent that the assessee's method of accounting of recording the commission on the basis of receipt of material is accepted by the revenue in earlier as well as subsequent assessment years. The assessee has submitted the copies of the account of the various parties from whom the commission has been received from various suppliers during the financial year. The above details are also supported by the invoices of the suppliers where it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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