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A ruling of the tribunal in Flipkart Online Services Pvt. Ltd. Case (2018] 92 taxmann.com 387 (Bangalore – Trib.)/[2018] 64 ITR(T) 358 (Bangalore – Trib.)/[2018] 170 ITD 751 (Bangalore – Trib.)/[2018] 193 TTJ 685 (Bangalore – Trib.) [25-04-2018] dealt on the subject whether loss incurred by the company of having sold the goods at lower than the cost price in order to attract customers is capital in nature of acquiring/creating intangible asset in the form of goodwill/Brand value so as to reap benefits in the later years. The Tribunal allowed such trading loss like any other business expenditure and even dismissed miscellaneous applications and appeals of the department of which one such decision is in ITA No.369/Bang/2019 for AY 12-13 dated 14 February 2022 following coordinate bench decision in ITA No.202/Bang/2018 dates 24 April 2018. The year after year huge additions and demand has pushed the company to seek interim relief from Karnataka High Court. 

In this case the Tribunal placing reliance on the two precedent landmark rulings of Hon’ble Supreme Court in the case of Calcutta Discount Company and A.Raman & Co to the effect that no income which could have been earned but not earned is to be taxed held that the Assessing Authority should stick to computing total income based on real prices fetched in the course of business and not market prices thus making Flipkart online case judgement of Bangalore tribunal close to a contempt case. 

Considering that there is no substantial question of law much less any law question this matter should be dealt with accordingly by the High Court so as to render ITAT order as full and final. Also this order must receive wide publicity and be perused by NFAC and every assessing authority/AU and the commissioner (A) in daily practice in assessment framing. 

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