TMI Blog2012 (6) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case - In favour of the assessee. - 119 of 1996 - - - Dated:- 9-9-2010 - ADARSH KUMAR GOEL, AJAY KUMAR MITTAL, JJ. JUDGMENT Ajay Kumar Mittal J.- 1. In this reference filed under section 256(1) of the Income-tax Act, 1961 (for short "the Act"), the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (in short "the Tribunal"), vide order dated May 30, 1996, passed in Reference Application No. 310/ Chandi/95 arising out of I. T. A. No. 1408/Chandi/94 at the instance of the Revenue, in respect of the assessment year 1990-91, has referred the following questions of law, for the opinion of this court : "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of scrutiny, the Assessing Officer came to the conclusion that profits of the combing unit had been reduced to increase the profits of the spinning unit with a view to claim higher relief under section 80-I. It was noticed that for the assessment year 1989-90 the assessee had shown profit in the combing unit at 11.04 per cent. whereas the same had declined to 7.11 per cent. in the year relevant to the assessment year in question. Similarly, in respect of the spinning unit, the gross profit rate was 14.28 per cent. whereas in the assessment year under discussion had shown the said rate at 14.12 per cent. In the opinion of the Assessing Officer, the profits of the spinning unit had been inflated to the extent of Rs. 96,16,477. The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as slightly less than the market rate, it was still higher than the cost price of the combing unit. The Tribunal, after relying on a decision of another Tri- bunal, in Punjab Con-Cast Ltd. v. Asst. CIT reported in [1994] 49 ITD 430 (Chandigarh) was of the opinion that the Assessing Officer was not empowered to reallocate the expenses under section 80-I(6) or 80-I(8) of the Act. It was noted, in particular, that for the assessment years 1986-87 to 1989-90, the assessee had been allowed relief under section 80-I without any interference from the Assessing Officer. The Tribunal, thus, held that there was no justification for the learned Commissioner of Income-tax (Appeals) to have set aside the issue for reconsideration of deduction under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the submissions of the learned counsel for the assessee that section 80-I(8) could apply only where the goods had been transferred from one unit to other unit at less than the market price. It has been demonstrated before us by the learned counsel for the assessee that except in respect of one lot of 3539 Kg. out of total of 815361 Kg. there was a slight difference of Rs.7,715. It is significant to note that when the total transfer was of the order of Rs. 14,37,24,264, the difference of Rs. 7,715 was insig- nificant and very nominal. It is also significant to note that though the transfer rate was slightly less than the market rate, it was still higher than the cost price of the combing unit. 15. In the case of Punjab Con-Cast L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit to the spinning unit, there was no justification for making any adjustments as made by the Assessing Officer. The first two grounds are, therefore, accepted." 10. The Tribunal on appreciation of evidence concluded that there was no difference in the rate adopted by the assessee in respect of transfers from the combing unit to the spinning unit and that the provisions of section 80-I(8) and (9) were not attracted in the present case. 11. In view of the aforesaid findings of fact recorded by the Tribunal, which has not been shown to be perverse in any manner by the learned counsel for the petitioner-Revenue so as to persuade this court to hold that the Tri- bunal had erroneously decided the issue in favour of the assessee. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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