documents
placed on records, where in the DN
represent the Debit Note towards freight,
7
-: 8: -
issued to party confirming the business
relation with
debit note
was also produced. He also submitted that method of accounting of the
debit note is that the customer account is debited with ... corresponding credit is made to unpaid freight
account towards freight charges and octroi shown in the debit note,
service charges account towards the amount
Together with debit notes for
O.M.P. 582 of 2010 Page 6 of 19
the balance freight
observed the details of total
debit notes issued by the assessee segregated under following heads:-
Nature of debit Amount (`)
Service charges and commission income ... respect
of which the assessee had issued Debit notes. It, therefore, transpires that by
issuing Debit notes, the assessee credited the income account
During the course of assessment proceeding the A.O. noted that the
assessee has debited freight expenses of Rs.19,67,294/- to the Profit
3166/M/11
A.Y.05-06
assessment, disallowance of freight charges under section 40(a)(ia)
and addition on account of discrepancy in turnover ... this account. The AO also
noted that the assessee had debited freight charges of Rs.88,96,042/-
in the P&L Account
delivery basis and no freight would be
charged. Therefore, whenever defendants had to pay freight charges, they
were issuing debit notes to plaintiff. Defendants thus
that in debit notes, which
were never supplied earlier, show some amounts such as premium in
quantity, clearing, forwarding, CVD, insurance, freight and other expenses ... invoices issued by
the plaintiff and debit notes were issued against these charges, but according
to defendant the freight charges, custom duty etc. are already
defendants
raised a debit note of same date i.e 21.04.2001 knowing fully well that the charges for
the freight has already been paid ... mention in
the list of documents filed by the plaintiff.
The debit note raised by the defendant is 21.04.2001 is Ex.PW1/8.
However
surprising to note that the freight of only 06 Trucks have been found to
have been debited @ 450/- per ton in its books of accounts
