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2013 (6) TMI 71 - HC - Income TaxDeduction u/s 80-IA & 80-IB - AO found that whereas assessee had earned a profit margin of 62.31% in respect of Unit no. 4, the overall margin of the assessee was only 9.92%. The Assessing Officer concluded that this represented a serious inconsistency in drawing up the accounts. - publication and printing of newspapers and periodicals - Job work for other units - whether the expenses allocated to Unit No.1 are to be taken into account for determining the eligible profits from Unit No.1? - Held that:- It is not in dispute that the printing charges charged by Unit No.4 to Unit No.1 were comparable to the market rates. It is a matter of record that during the period relevant to the assessment years 1997-1998 and 1999-2000 Unit No.4 was charging 77 paise per sheet for printing work done for third parties and 70 paise per sheet for printing done for Unit No.1. AO has also not found any manipulation or defect in the separate books maintained for Unit No.4. As there is no material to support the view that the job work charges charged by Unit No.4 from Unit No.1 were not at market rates it is in agreement with the view taken by the Tribunal that in absence of any defect or manipulation found by the AO in the books maintained for Unit No.4 and in absence of any material to indicate that the amount charged by Unit No.4 from Unit No.1 was not at comparable market rates, it would not be open for the revenue to disregard the profits of Unit No.4 as disclosed by the assessee only on the basis that the profits were significantly higher than profits earned by the assessee from other undertakings. Given the fact that Unit No.4 carries on job work of printing only, the expenses attributable to Unit No.1 which relate to the publishing business cannot be allocated to Unit No.4. Only those expenses which relate to the printing work carried on by the assessee in Unit No.4 are liable to be deducted from the job charges to arrive at the profits eligible for deduction under Section 80-IA of the Act or 80-IB of the Act as the case may be. Thus Tribunal was correct in relying upon the orders passed in the preceding years for disposing of the appeals relating to the assessment year 2004-2005 as attention has not been drawn on any material change that has occurred in this period. Thus assessee is entitled to deduction u/s 80-IA and 80-IB on the book profits of Unit No.4 as disclosed by the assessee - in favour of the assessee.
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