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2012 (10) TMI 25 - AT - Income TaxDisallowance u/s 145A - erroneous claim of Modvat credit on the raw material and packing material on the basis of purchase and not on the basis of consumption - Held that:- As decided in CIT v. Mahalaxmi Glass Works Pvt. Ltd. [2009 (4) TMI 182 - BOMBAY HIGH COURT] it is not appropriate to include the closing Modvat in the figure of closing stock without modifying the figures of purchases, sales and opening stock. As the authorities below have not adjusted all the relevant figures with the amount of tax, duty, cess etc., the impugned order is set aside and restore the matter to the file of A.O. for deciding it afresh - in favour of assessee for statistical purposes. Benefit of 5% margin u/s 92C(2) in determining the Arm's Length Price denied - Held that:- The Finance Act, 2012 with the insertion of sub-section (2A) to section 92C with retrospective effect has been made clear that where the variation between arithmetical mean and price at which the transaction has actually been undertaken exceeds 5% of arithmetical mean, the assessee shall not be entitled to exercise the option. Thus in view of this amendment to section 92C the CIT(A) was justified in not granting standard adjustment of 5% - against assessee.
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