Trade Discount on sales after considering commercial expediency & accrual method of accounting is allowable claim

Brief of the case:

In the case of ACIT Vs. Rukamani Iyer Mumbai Bench of ITAT held that the claim has to be judged in the light of commercial expediency. Relying upon the judgment of CIT v Associated Electrical Agencies {2004} 266 ITR 63 (Mad.) it was held that as such if the payment is made out of commercial expediency, despite there was no legal compulsion, the same is allowable.

Facts of the case:

• Assessee is the proprietor of M/s. P. P. International, which is a merchant exporter of pharmaceutical products.

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