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| The Tax Publishers2019 TaxPub(DT) 0818 (Del-Trib) INCOME TAX ACT, 1961
Section 28(i)
Where AO treated short amount received from consignees on account of scheme conversion in relation to reduction of price of equipments as non-Revenue expenditure, but any loss incurred by assessee in respect of trading goods had to be allowed as business loss, therefore, CIT(A) had rightly directed the AO to allow the same as business loss.
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Business loss - Allowability - Short amount received from consignees on account of scheme conversion in relation to reduction of price of equipment -
Assessee was providing Customer Premises Equipment (CPE) which consisted of set top box, dish antenna LNB and cable to consumers. However, the assessee reduced prices of the equipments. The assessee compensated this fall in prices and debited the same in its Profit and loss account as related to excess/short amount received from the consignees on account of scheme conversion. AO treated this as a non- Revenue expenditure, whereas CIT(A) had directed the AO to allow the same as business loss. Held: The change in the policy was accepted by the AO and no malafide intention had been brought on record on the part of the assessee. Any loss incurred by the assessee in respect of trading goods had to be allowed as business loss. Thus, the CIT(A) rightly directed the AO to allow the short amount received from the consignees on account of scheme conversion in relation to reduction of price of the equipments as business loss.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2006-2007
INCOME TAX ACT, 1961
Section 37(1)
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