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2014 (7) TMI 1060 - ITAT MUMBAIAccrual 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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