357. Rebate allowed to members by consumer co-operative stores – Whether allowable as business deduction
1. I am directed to say that an instance has come to the notice of the Board wherein the Income-tax Officer in the case of consumer co-operative store had disallowed the claim of deduction on account of rebate allowed on the purchases made by the members of the store.
2. The Board in consultation with the Department of Community Development and Co-operation has decided that rebate or bonus (which is in the nature of deferred discount) passed on by the consumer co-operative stores to their members on the value of the purchases made by them during a year should be allowed as a deduction in computing the business income of such a society.
Circular : No. 117 [F. No. 201/5/73-IT(A-II)], dated 22-8-1973.
