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2015 (8) TMI 371 - HC - Income TaxEntitlement to the benefit under Section 10B - Tribunal concluded that the order of the Assessing Officer needed to be restored to compute the eligible profit for the purpose of Section 10B of the Act on the basis of the ratio of turnover of sales - Held that:- Assessee had originally claimed benefit of Section 10B of the Act in its return in respect of its entire profit i.e. both trading as well as manufacturing activities. The Assessing Officer had called upon the appellant to furnish market rate of the purchases from its Associate Enterprises so as to determine whether or not the purchase price was reasonable. The appellant did not furnish the necessary information. However, it is also noticed by the Tribunal that the documents indicate that the profit of the appellant as per the tax audit report for the entire business activity is 6.14%, when the profit from actual manufacturing activity was 20.70%. It is a settled position that the claimant to a benefit of an exemption must establish its case for the exemption and the quantum of exemption it seeks by leading necessary evidence before the authorities. This the appellant failed to do. Reliance upon the decision of the Karnataka High Court in the case of Fusion Software Engg. (P) Ltd. (2011 (11) TMI 448 - KARNATAKA HIGH COURT), to our mind, is misplaced, as in the facts of that case, the exemption under Section 10A of the Act was denied in its entirety to the assessee therein merely because it had not maintained separate books of accounts. In the facts of the present case, exemption under Section 10B of the Act is not being denied to the assessee in its entirety. However, the profits earned are being allocated by application of turnover method i.e. percentage of total sales. It is indeed one of the methods of determining the profits to be allocated between two or more profit centres. Adoption of turnover method to allocate profit cannot in the present facts be said to be perverse, in any manner. - Decided against assesssee.
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