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Allowability of cash discount

Tax queries 784 views 3 replies

An assessee having turnover around Rs. 13 crores has claimed Rs. 8 lakhs as Cash Discount in AY 2009-10. The amount of CD is deducted from the respective Invoices. There is no other documentary evidence supporting the said CD. The Assessing Officer has disallowed the entire amount of CD Rs. 8 lakhs during the Scrutiny, on the ground that the same cannot be cross verified. Now the matter is up with the CIT(A).

Pls provide any suitable case law or any favourable ground for the allowability of Cash Discount.

Replies (3)
how cash discount can be deducted from invoice ?only trade disc can be deducted which has no accounting and taxation effects.cash disc represents the diff between invoice amt and actual money recieved.

reconcile the accounts with buyer and get certificate from them regarding availing cash discounts, this will serve the puprose.

yes agree with both... if there is cash discount how it would be tax invoice ??? and as answer given by U S Sharma is also correct...


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