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2014 (7) TMI 798 - AT - Income TaxDeduction u/s 10B(7) r.w. section 80IA(10) – reimbursement of cost of employees of PCEPL which were hired by assessee (PEPL) for doing the work - shown as professional fee given to sister concern - Held that:- For applying the provisions of section 10B(7) r.w.s 80IA(10), AO has first to show that cost of hiring employees by the assessee had resulted into more than ordinary profit - This could happen only if the assessee had paid less than the market value to the sister concern on account of hired employees - There is no material on record to show that sister concern had hired the employees at less than market price because only in that case it could be said that the assessee had paid less than the market price - The decision in Pyramid Entek P. Ltd Versus Assistant CIT RG 3. Thane [2014 (7) TMI 751 - ITAT MUMBAI] followed - the AO has not given any finding that by hiring the employees/professionals from the sister concern the assessee had paid less than market price resulting in shifting of profit from its non-eligible unit to eligible unit u/s 10B – Decided against Revenue. Restriction of disallowance u/s 40(a)(ia) of the Act – TDS not deducted on professional charges paid to sister concern – Held that:- Following the decision in CIT vs. Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] - the deduction u/s 10B is allowed in respect of disallowance made u/s 40(a)(ia) – thus, there was no illegality in the order of CIT(A) – Decided against Revenue.
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