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TMI Blog2024 (5) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, in order to get incentives, the dealers will offer discount to the customers. In the present case, it was the claim of the assessee that he had passed on incentives received from manufacturers to the customers. Therefore, we are of the considered opinion that the AO is erred in excluding incentives from turnover for the purpose of determining the income of the assessee. Although the assessee has claimed it has passed on incentive received from the manufacturers to the customers, but could not substantiate its claim with necessary evidences. The only option left with us is to estimate the income from the business by adopting reasonable net profit considering the nature of the business of the assessee. The assessee has already declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,26,837/- referable to incentives received by the Appellant ignoring the fact that such amount was already credited to the Profit and Loss account(by way of reducing the cost of the goods) and hence no addition of such amount could have been made since income is already estimated by AO on turnover. 4. The NFAC ought to have appreciated that trade incentives are an integral part of business income and they form part and parcel of the net results of business and that they are not income from an additional source and therefore no separate addition ought to have been made by the lower authorities. 5. Without prejudice to the aforementioned grounds, the appellant prays that the addition of incentives of Rs. 57,26,837/- to the estimated profits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. 5. The learned Counsel for the assessee Shri Shashank Dundu, submitted that the learned CIT (A) NFAC is erred in sustaining the addition made by the Assessing Officer towards estimation of profit in addition to making separate addition towards incentive received by the assessee without appreciating the fact that the incentives received by the assessee from the manufacturers is part and parcel of the business receipt of the assessee. The learned Counsel for the assessee further submitted that when the assessee has received incentives from the manufacturers, the same is passed on to the customers to promote their brand and to achieve higher turnover. Therefore, when the assessee is considering the incentive received as part of his business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entive and made separate addition towards incentive received by the assessee. We find that the incentive is normally given by the manufacturers of products to promote their produce in a competitive market. The incentive is for bulk purchase of a particular brand. The dealer has to achieve the sales target to get incentive. Therefore, in order to get incentives, the dealers will offer discount to the customers. In the present case, it was the claim of the assessee that he had passed on incentives received from manufacturers to the customers. Therefore, we are of the considered opinion that the Assessing Officer is erred in excluding incentives from turnover for the purpose of determining the income of the assessee. At the same time, although ..... X X X X Extracts X X X X X X X X Extracts X X X X
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