TMI Blog2012 (7) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment should form part of the total turnover. The second question is whether the turnover discount offered by the assessee to its dealers should form part of the total turnover for the purpose of computing deduction under Section 80HHC of the Act. 3. We may notice facts in brief: 3.1 The appellant-assessee is a company engaged in the business of production and sale of Plastic Hose Pipes used in agriculture operations. During the year relevant to assessment year 1992-93, the assessee made net sales of ₹ 11,62,61,934/-. The assessee also had made certain exports during the said period. In terms of the provisions contained in Section 80HHC as it stood at the relevant time, the assessee was entitled to deduction on such exports sales in terms of the formula provided in said section. It is well known that Section 80HHC of the Act provided for deduction in respect of profits retained for export business. Under sub-section (1) of Section 80HHC of the Act, as it stood at the relevant time an assessee who was engaged in the business of export of goods or merchandise to which a section applied was entitled to deduction in computing of total income of the assessee of the profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of discount allowed to the declare on their turnover which they have done with the assessee during the year. Hence, it is termed as turnover discount . According to the assessee, it is not discount from the assessee's turnover. We are unable to agree with this submission given by the assessee. As rightly observed by the learned CIT(A), sales takes place at the first instance and discount is given at the later stage. Therefore, the terms total turnover has to be understood with respect to the amount shown on the sale bills and the subsequent discount allowed to the declare can only be treated as an item to be debited to the P L A/c. In this context we have to point out with respect that the case law relied on by the learned counsel in the case of Madras Rubber Industries (P) Ltd. supra is not persons to the issue before us at that was a case decided by the Hon'ble Supreme Court with reference to valuation under the Central Excise and Salt Act, 1944. In the context of I.T. Act, that case law is distinguishable with respect to the term total turnover as appearing in Sec. 80HHC. 7. Learned counsel Mr. Karia for the appellant submitted that the Tribunal committed s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e profit and loss account provide that shall set out the various items relating to the income and expenditure of the company arranged under the most convenient heads; and in particular, shall disclose the information specified therein including the turnover, that is, aggregate amount for which sales are effected by the company. 11. Having heard the learned counsel for the parties and having perused the material on record, we may first notice the discount scheme framed by the assessee. By Circular dated 01.04.1991, the assessee addressed the tender letter to all its dealers and conveyed that there will be modification of the previous turnover discount (TOD for short). Henceforth, the discount would be allowed in following manner: Net value Excluding Taxes TOD% Dutron Kanafles Suction Delivery House: Size 50 mm to 200 mm (Excluding Duct Hose) : Below ₹ 2.0 lacs Nil : ₹ 2.0 lacs above 2% : ₹ 3.0 lacs above 3% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period [and determined in accordance with the provisions of this Act and the rules made thereunder] [Provided that in the case of a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, the sale price of such goods shall be determined in the prescribed manner by making such deduction from the total consideration for the works contract as may be prescribed and such price shall be deemed to be the sale price for the purpose of this clause;] 15. From above definitions it can be seen that turnover for the purpose of the said Act is an aggregate of the sale prices received and receivable by dealer in respect of sales of goods in course of inter-State trade or commerce made during the prescribed period. In turn, the term sale price in Section 2(h) of the said Act means the amount payable to a dealer as consideration for sale of any goods as reduced by any sum allowed as cash discount according to the prevailing practice in the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STC page 472. We also perused the such decision. It was a case wherein the assessee had offered trade discount to its dealers on the sales effected. Such discount offered was in form of a credit to be reflected in the account of the dealer. Such credit could be used by the dealer only for the purpose of making laser purchases from the assessee. It was in this background the Division Bench of Madras High Court held that such discount cannot be excluded from the computation of turnover for the purpose of Central Sales Tax Act. Facts in our case are, however, different. The discount the assessee offered to its dealer was in cash but proportionate to the total sales effected by an individual dealer. The amount of discount depended on such total sales. In view of the decision of the Apex Court in case of M/s. Advani Coorlikon (P.) Ltd. (supra), such discount would not form part of the sale price that the assessee would receive. It is not in dispute that in the books of accounts also the assessee had shown the reduced amount as total sale price. 19. The Rajsthan High Court also in case of Commissioner of Income Tax Cs. Pesticides India Ltd. (supra) taken a similar view. In the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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