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2012 (12) TMI 461 - HC - Income TaxAddition u/s 40A(2)(a)(b) on the ground that the assessee had allowed discount @ 3% to M/s Ganga Pustakalaya (sister concern) while to the other whole sellers it was allowed @ 2.5%? - held that:- The Tribunal has found that the assessee had offered 2.5% on the counter sales whereas 3% discount was given to sister concern, M/s Sri Ganga Pustakalay, which was carrying the sale outside Varanasi and incurring the expenses on account of packing, transportation etc. Therefore, the Tribunal was of the view that the Assessing Officer was not justified in making the disallowance under Section 40A(2) of the Act. The Tribunal has further held that the provisions of Section 40A(2)(a) of the Act would apply where any deduction is claimed towards excessive and unreasonable expenditure has been incurred by assessee but in the present case neither any expenditure has been incurred nor any deduction has been claimed for the amount which has been charged less than that from other customers, thus provision would not apply. It is not disputed that the assessee has neither claimed any deduction as expenditure incurred towards discount offer nor the lesser price charged by it. Order of ITAT confirmed - Decided in favor of assessee.
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