Threepence Craft Vs CIT/ITO (ITAT Delhi)
Trade Discount Not Commission- AO Made Enquiry, CIT Only Disagreed -CIT Cannot Substitute AO’s View:- ITAT Delhi Quashes 263 Order & Consequential Reassessment
Assessee filed appeal against revisionary order u/s 263 passed by CIT, & also against consequential assessment order u/s 143(3) r.w.s. 263 confirmed by CIT(A).
The dispute arose from CIT’s revision on ground that AO had not examined applicability of TDS u/s 195 on 12% discount allowed to overseas buyer, which was treated by CIT as commission liable for deduction of tax. CIT further directed AO to re-examine genuineness of purchases & exports.
Assessee argued that the 12% deduction was a trade discount agreed in purchase agreement, not commission. Buyer remitted balance after deducting discount, & no payment was made by Assessee to any agent. All details including purchase orders, inward remittance certificates & agreements were furnished during original assessment, which AO accepted after due enquiry. It was contended that CIT wrongly exercised jurisdiction u/s 263 merely on AO’s proposal without independent application of mind. Reliance was placed on Delhi High Court rulings in Sunbeam Auto Ltd., DLF Ltd., Vikas Polymers & ITAT decisions (SSG Infratech Pvt. Ltd., Volkswagen India Pvt. Ltd.).
