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THE COMMISSIONER OF INCOME TAX VI Versus SUSHEN OIL AND FOODS

2016 (6) TMI 107 - ANDHRA PRADESH HIGH COURT

Difference in brokerage receivable shown in the assessee’s accounts and sellers accounts - Addition to the income returned by the assessee on the ground that the amounts correspond to the TDS certificates having been offered for tax - method of accounting followed - Held that:- CIT(A) while accepting the claims of the assessee with regard to the returned incomes for th years under appeal, also held at the same time that the assessee is eligible to claim credit for TDS only in respect of income o .....

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he purchaser, but extents till the time the sale proceeds are realized by the seller from the buyer. Considering the nature of the assessee’s business, as a del cre dere agent, in which actual receipt of the brokerage would depend on the actual realization of the sale proceeds by the seller from the purchaser, as claimed by the assessee and accepted by the CIT(A), assessee is justified in following cash system of accounting, finding it to be appropriate for its business. When the assessee claims .....

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#8377; 17,00,887/- was added to the income returned by the assessee on the ground that the amounts correspond to the TDS certificates having been offered for tax. The first appellate authority had dealt with this aspect in its orders dated 09.02.2009; paragraph 4 of which reads as under: 4. The last ground of appeal is against the addition of ₹ 17,00,887/-. 4.1 During the assessment proceedings, AO cross verified the accounts of seven seller parties & determined the difference at ͅ .....

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nder the mis-conception that the difference represented the amounts paid to the assessee while in fact they are the amounts debited on account of non payment by the buyers. 4.3 On perusal of the relevant parties account, I agree with the contention of the appellant. AO has erred in ignoring the debits made to the assessee s account by the seller parties. He failed to appreciate that the credit & debit balances in the books of the sellers were not on account of brokerage alone but after adjus .....

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ms for which the TDS was made and on account of the fact that the assessee was a del cre dere agent and as such the assessee did not receive these amounts as it was following cash system of accounting so far as these transactions are concerned. 3. The fact of the matter that the assessee was accounting these transactions on cash basis has not been challenged before the Tribunal. The Tribunal, in fact, considered this aspect in its orders dated 03.02.2014 and recorded as under: ….. In the .....

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