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2010 (4) TMI 686 - AT - Income TaxTransaction Net Margin Method or cost plus method - The assessee has not taken the ground that cost plus method is the most appropriate method and the TPO has struck down this method as inappropriate - The decision of Mumbai ‘L’ Bench of the Tribunal in the case of UCB India (P.) Ltd. v. ACIT where it is held that section 92C, read with rule 10B(1)(e) deals with Transactions Net Margin Method (TNMM) and it refers to only net profit margin realised by an enterprise from an international transaction or a class of such transaction, but not operational margins of enterprises as a whole." – Held that: no other alternative but to set aside the entire issues to the file of the Assessing Officer for fresh adjudication - In view of the peculiar circumstances of this case, we permit the assessee to file yet another report contemplated under section 92E of the Act and also support its ALP under any other method by relying on fresh comparables and documents with these observations, we set aside the matter to the file of the Assessing Officer for fresh adjudication de novo, in accordance with law after giving the assessee adequate opportunity - The revenue is allowed for statistical purposes Business income’ or ‘Income from other sources’ - Interest on FDRs - When the assessee has not brought out any evidence to demonstrate that the interest income in question is having a nexus with business transaction, it cannot be assessed under the head ‘Business income’ - Non-furnishing of required details, , entitled the Assessing Officer to draw adverse inference and tax interest income under the head ‘Income from other sources’ – The appeal of revenue is allowed Netting of interest - The issue of netting is covered against the assessee by the judgment of Hon’ble Bombay High Court in the case of CIT v. Asian Star Co. Ltd.(2010 -TMI - 77709 - BOMBAY HIGH COURT)- The appeal of revenue is allowed. Relief u/s 80HHC - assessee shall not be entitled to reduction from the purchase cost, of sales value of rough diamonds exported, which are not scrap or sales returned. If they are sales returns, as claimed by the assessee, on account of rejection, then the assessee would be entitled to reduction from purchase cost. This fact that rough diamonds were rejected and returned to the same party, from whom they were purchased, at the same cost, has to be proved by the assessee, for enabling it to get reduction from the purchase cost, as only such return to the seller at the same cost can be called a sales return. - Rejection of certain rough diamonds purchased, and re-exporting them at a profit margin, does not in our humble opinion entitle the assessee to claim the same as scrap or purchases returned. - Appeal of the revenue allowed.
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