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TMI Blog2023 (6) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... shelf life of the seeds, Tribunal has held that it is imperative for the assessee to take into account the quantity of unsold seeds at the end of the year and the need to re-validate their further utility and to take them into stock for the next season. Therefore, it cannot be said that the provision for sales returns is unascertained or unreasonable. Affirming the findings written by CIT(A), Tribunal dismissed the appeal of the revenue.No error or infirmity in the view taken by the Tribunal. No substantial question of law. - I.T.T.A.No. 31 of 2023 - - - Dated:- 20-3-2023 - HON BLE THE CHIEF JUSTICE UJJAL BHUYAN AND HON BLE SRI JUSTICE N. TUKARAMJI For the Appellant : Mr. J.V. Prasad, learned Standing Counsel, Income Tax Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. 7. Assessing officer noted that assessee had submitted a single Profit and Loss Account for both the businesses. On request made by the assessing officer, assessee had submitted bifurcated Profit and Loss Account for the two businesses. However, assessing officer noted that common expenditures between own production and trading of seeds were divided based on the Cost of Goods Sold (CoGS). Accordingly, income from agricultural activity was arrived at Rs. 40,29,04,539.00 and income from trading activity was arrived at Rs. 8,35,06,959.00. However, assessing officer held that division of expenditure based on cost of goods sold was not acceptable because business operations for own production of seeds are entirely different from trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apportionment, which was accepted by the Department in the earlier years. (ii) As the appellant follows certain uniform procedures of allowing discounts to customers. The expenditure on personnel consists of salaries and other benefits to production and sales manpower. Staff benefits to sales personnel is predominant in the total personnel cost. The cost of goods sold represents the cost of production as adjusted to the opening and closing stock of seeds. In other words it reflects the quantity of sales at cost price As against selling price which consists of a margin on the cost, hence, the expenditure allocated between agricultural and non-agricultural based on cost of goods sold reflects appropriate allocation of common cost. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and chemical treatment to sustain its utility; and that the stock of seeds is subsequently received in April, May, June and July; that at the time of receipt of the stock the seeds are taken into stock with appropriate adjustment to the customers/sales distributors outstanding balance and such a practice is part of the said business and is driven more by the seasonal nature of the business and also on account of short shelf life of the seeds. In the circumstances Ld. CIT(A) satisfied that, inasmuch as all the sales returns are subsequently taken into stock in the books of the assessee, the provision for sales return cannot be treated as an asset and liability. 12. We do not find anything perversity in the findings of the Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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