Section 37 of Income Tax Act, 1961—The issue that is sought to be urged by the Revenue is whether the ITAT erred in affirming the order of the CIT (A) by allowing the Assessee to book all of the revenue expenditure corresponding to the distributors’ commission, distributors’ incentives and outward freight cartage in the year under consideration whereas according to the Revenue it was required to be spread over on the basis of the ‘matching principle’?

Held that—While as a general proposition this may be acceptable, the fact remains that the Assessee claimed the entire expense as revenue expenditure in his accounts for AY 2006-07 and if sought to be altered on the basis of the above principle it would indisputably affect the accounts of the subsequent year. This is significant because in the AY in question, the AO has not rejected the accounts on the basis that it does not present the true and correct picture of the business of the Assessee.

the Court finds that that view taken by the ITAT is a plausible one and does not give rise to any substantial question of law.[PR. COMMISSIONER OF INCOME TAX VERSUS ESSEL AGRO PVT. LTD.][2019] 16 ITCD Online (10) [DELHI HIGH COURT]