Allowability of Cash Discount on MRP
deepak K Gujrati
(Querist) 12 January 2010
This query is : Resolved
Whether sales tax returns can be used as an evidence to prove that the turnover shown by the assessee is the final figure and department can not disbelieve the sales figure derived after deducting cash discount.
The I T Deptt. is relying on Cash Memo where discount has been allowed manually and name of the customer is also not mentioned.
aman kumar
(Expert) 12 January 2010
sales tax returns can be used as an evidence to prove that the turnover shown by the assessee is the final Cash Memo where discount has been allowed manually and name of the customer is also not mentioned is accepted because it is not practical to show the name on small sell
Vineet
(Expert) 12 January 2010
The Sales Tax Returns are not the direct evidence but a corraborative evidence.
If the IT Department is relying on a cash memo to determine the sales turnover, it has to take into consideration the discount mentioned on the same. In cash sales, name of customer is not material as the same is seldom mentioned on the cash memo.
soumitra basu
(Expert) 13 January 2010
The income tax department cannot disbelieve the sales tax return filed by the assessee. There may be some Tribunal/High Court judgment on this issue. It is immaterial whether the discount has made in cash memo manually unless there is positive evidence that the cash memos are manipulated later on.
Vineet
(Expert) 13 January 2010
Sales tax returns are filed by assessee only hence they are not sacrosant. If the IT return is being challenged, then why can't sales tax return be disbelieved. In fact if IT authority proves that the turnover has been suppressed, the information may be shared with ST authorities for necessary action at their end.
The core issue here is if the cash sales memos are being accepted as evidence of sale, any discount mentioned on the same also has to be accepted unless it is proved that the cash memos have been tempered with.
