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2020 (9) TMI 1123 - AT - Income TaxDisallowance of selling and marketing expenses paid - Commission on sale - receipt from the sale of FSI was not offered to tax, therefore, the expenses was not liable to be allowed - As argued that the commission or brokerage expenses are accrued and the liabilities towards such expenses are created as soon as the deal takes place between the assessee company and the party and accordingly the brokerage/commission is due, hence, the claim of the assessee is liable to be allowed - HELD THAT:- The assessee company has paid 2% commission on sale of FSI 53.33 crores for the year under consideration. The commission has been booked against these transactions in the year under consideration. Since the FSI was not offered in the current year, therefore, the AO has declined the claim. It nowhere seems justifiable in view of the decision in the case of Mysore Tobacco Co. Ltd. Vs. CIT [1978 (5) TMI 29 - KARNATAKA HIGH COURT] in which it is held that the accepting certain specific provisions relating to amortization of initial expenses in certain cases, there is no other statutory provision for allowing revenue expenses in a phased or spread out manner. Expenses are required to be claimed and allowed only in the year in which the expenses are incurred or the liability towards such expenses accrued. Revenue expenditure is essentially allowable in the year to which it pertains or in which it is incurred. However, to support his claim, the assessee has also relied upon the decision in the case of Calico Dyeing & Printing Works Vs. CIT [1958 (3) TMI 59 - BOMBAY HIGH COURT] wherein claim of the assessee was allowed in similar circumstances. We are of the view that the declining of the claim of commission expenses is nowhere justifiable, hence, we set aside the finding of the CIT(A) on the issue. The claim is hereby allowed in the relevant year. Accordingly, we allowed the claim of the assessee.
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