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2014 (10) TMI 490 - AT - Income TaxProvisional commission not ascertained – AO treated as contingent liability – Held that:- The assessee has been paying commission on a certain percentage to the agents on the exports sales made - the assessee has been paying commission @ 2% to 3% - For most of the invoices the commission has been paid before 31st March 2007 - Only for the past of the sum aggregating ₹ 9,22,777, the commission on the sale made remained payable for which the assessee has made a provision, which too has been quantified on the basis of fixed rate and part practice - otherwise also, it is a genuine business expenditure which is allowable as deduction and the same has been quantified on the basis of certain percentage even though it has been discharged in a near future date - There is a reasonable certainty in the quantification of the commission payable and such a provision is to be allowed in this year only - in the subsequent year such a payment has been accepted by the AO – thus, the order of the CIT(A) is upheld – Decided against revenue. Suppression of burning loss – Held that:- The assessee's contention that it has shown the sale of scrap generated during the course of process has not been rebutted and such a sale has been allocated on pro–rata basis on production - The finding of the CIT(A) that if the scrap sale of 240.740 MTs is reduced from the shortage shown then the assessee's irrecoverable loss is only 2.02% which is much below the 3.74% worked out by the AO has not been disputed - such an addition cannot be sustained without finding any defect either in the production record or in the books of account or in the scrap sales shown and adjusted by the assessee, then there is no justification of making any addition simply on ad–hoc manner as done by the AO by holding that 0.74% of the loss claimed by the assessee is excessive – the order of the CIT(A) is upheld – Decided against revenue.
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