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2014 (7) TMI 1060 - AT - Income TaxAccrual of income Commission received - Year in which taxable - Credit notes were generated in later year - Held that:- The amount received by the assessee was not normal business discount- it was sales-performance based incentives given by the suppliers to the assessee, that the suppliers would be issuing discount notes after the accounting year was closed - It is a normal practice of the business to evaluate the performance and give some kind of incentives to the customers - principles of res-judicata do not apply to income tax proceedings and every AY is a separate unit - the assessee had paid taxes on the income earned by it along with the interest - income from the trade incentives had not accrued to it during the year under appeal that the order of the FAA does not suffer from any legal infirmity Decided against Revenue. Restriction of disallowance on expenses Held that:- For disallowing any expenditure AO has to establish that it was not incurred for carrying out the business or that the expenses were not genuine - Merely because certain expenditure was incurred in cash cannot be the basis for making any disallowance - Act does not prohibits cash payments - the AO had not invoked the provisions of section 40A(3)of the Act - entire expenditure was not incurred in cash majority of the payments were by cheques - the genuineness of the expenditure is not in doubt, thus, the order of the FAA does not require any interference from our side Decided against Revenue.
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