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2018 (3) TMI 379 - AT - Income TaxRevision u/s 263 - Addition on account of freight and forwarding charges - Held that:- The assessee absorbed the freight and forwarding charges as its expenditure by debiting to profit and loss account by giving corresponding credit to the customers account as the assessee had to reimburse the freight and forwarding charges to the customers. This fact is also evident from the statement of sales furnished by the assessee before the lower authorities. We also find from the profit and loss account of the assessee that a sum of ₹ 1,25,34,106.76 is credited towards gross sales before deduction of freight and forwarding charges. We also find that the total freight and forwarding charges were paid for goods consigned through transporters to various parties and these charges were paid by the customers on behalf of the assessee as consignment notes are on ‘To pay basis’ and for which, the assessee had credited the customers account accordingly. Hence we do not find any infirmity in the accounting treatment given by the assessee and the claim of deduction of freight and forwarding charges in the sum of ₹ 6,33,344/- is in order. The assessee had not made any double deduction claim towards freight and forwarding charges as wrongly suspected by the CIT in his section 263 order and by the ld AO in the giving effect proceedings. The ld DR prayed for setting aside of this appeal to the file of CIT-A for adjudication of the issue on merits. We do not deem it fit and necessary as the facts and the treatment of gross sales before freight and forwarding charges credited in the manufacturing account and the statement of sales submitted before the lower authorities, are staring on us. Absolutely there is no scope for taking a different view in the impugned issue. Assessee had pleaded the same before the CIT in section 263 proceedings ; before the AO and before the CIT-A by way of written submissions together with evidences in support of its submissions, which has not appreciated by the authorities below. Accordingly, the grounds raised by the assessee are allowed.
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