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2015 (1) TMI 517 - AT - Income TaxTrading addition - CIT(A) deleted the addition - Held that:- The assessee has submitted every lot of seeds purchased containing different quantity of oil and after making laboratory test report, the payments are made to the supplier which is evident from the assessee’s reply dated 16.12.2009, which has been reproduced by the CIT (A). Also for the year under consideration, the gross profit rate of 8.18% was better than the gross profit rate of 7.68% in the immediate preceding year. For the year under consideration, the turnover has also increased - Decided against revenue. Addition invoking the provisions of section 2(22)(e) of the Act - CIT(A) deleted the addition - Held that:- The transactions are of business nature. Therefore, they do not fall within the ambit of section 2(22)(e) of the Act - Decided against revenue. Addition made u/s 80IB - CIT(A) deleted the addition - whether the assessee is a small scale industry or not? Held that:- This issue has already been decided in favour of the assessee by the ITAT in assessee’s own case for assessment years 2000-01 to 2003-04 wherein it has been held that assessee was enjoying the SSI status, therefore, it is entitled for deduction u/s 80IB in those years also. The facts remain same, hence, the assessee is entitled for deduction in this year also. As far as, the allowability of deduction u/s 80IB on the trading profit is concerned, the CIT (A) has not given any finding. Therefore, in the interest of justice and equity, we find it appropriate to remand the issue to the file of the CIT (A) - Decided in favour of revenue for statistical purposes. Addition u/s 80IA - CIT(A) deleted the addition - when the provision of section 80IA will become applicable upon the appellant? - Held that:- It is not at all required that losses or other deduction which have already been set off against the income of the previous year should be reopened again for the purpose of computing admissible deduction u/s 80IA of the Income Tax Act, 1961. The year from which option has been exercised is to be treated as the initial assessment year but after that the 10 years have in continuity. Thus no fault in the order of the CIT (A) - Decided against Revenue. Dis allowance section 14A of the Act read with Rule 8D - Held that:- Bombay High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] held that Rule 8D is applicable from assessment year 2008-09 only. But, at the same time, Hon’ble High Court has also observed that the AO is duty bound to compute the disallowance by applying a reasonable method having regard to the facts and circumstances of the case. Considering all these facts and case laws, we find it appropriate to set aside this issue to the file of the AO to be decided as per law, of course after providing an opportunity of being heard to the assessee - Decided in favour of assessee for statistical purposes.
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