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2020 (5) TMI 237 - HC - Income TaxDiscount to the customer - Disallowance as it is disproportionately higher to the percentage of discount granted in earlier year though there is increase in the turnover and the rate of tax paid - HELD THAT:- AO has not doubted the books of accounts of the appellant. AO has held that there is nothing on record to say that assessee was adopting any uniform policy in respect of discount and it was being given in the uniform way to the customers. The amount on account of discounts and rebates has been disallowed. CIT(Appeals) has held that the burden of proof lies on the assessee in order to claim that the expenditure falls under Section 37(1) - Claim of the assessee under this head is not fully verifiable in nature. Tribunal vide impugned order negatived the assessee’s contention on the ground that because the turnover has increased in the subsequent year therefore higher rate of discount is to be allowed cannot be accepted because the discount and rebate is at percentage basis and not on the basis of the turnover. Books of accounts of the assessee as well as the material produced by the assessee was not disputed by the AO - merely because there was variations in the previous and subsequent year with regard to the discount and rebates, AO should not have disallowed the claim of the appellant with regard to the discount and rebates and profits.In the subsequent year, even though the amount incurred by the appellant on account of discount and rebates was ₹ 26,33,892/-, however, the profit has increased to ₹ 42,50,777/-, which was accepted by the Revenue - Disallowing the amount claimed by the assessee on account of discount and rebates is not correct - Decided in favour of the assessee.
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