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2021 (8) TMI 290 - AT - Income TaxDisallowance of deduction u/s 10AA - AO worked out the profit of the assessee @ 8% of the turnover without invoking provision of sub-section 9 of 10AA r.w.s. sub-section 80IA(10) - CIT-A deleted the addition - HELD THAT:- We find merit in the submission of ld. Senior counsel of the assessee that the assessee has shown substantial profit in all years and the revenue has not doubted such profit except in the year under consideration - similar profit almost consisted for about 80% had been accepted for assessment years 2009-10 to 2012-13 in the order passed under section 143(3) and the assessee has again shown similar profit for in assessment year 2015-16. The comparable instances of FMPPL is not applicable as the assessee is having 100% export oriented unit. The customer of assessee is in Europe or Germany. The FMPPL only manufacture soft mantles which are commonly used as pertexmax in lighting lamps only. Again there is no street gas light for use of such product. Neither the product of comparable nor end using of the comparable nor the turnover of the said company is comparable with the assessee as noted above, the profit of the assessee can only be incurred by invoking the provision to subsection 9 of 10AA r.w.s. 80(IA) only. Therefore, we do not find any infirmity in the order passed by Ld. CIT(A) which we affirm. In the result, ground No.1 of the Revenue’s appeal is dismissed. Disallowance of interest of partner capital - AO held that non capital charge of interest and non-payment of remuneration for working partner has been done to enhance the profit of assessee-firm which is exempt from taxation and to reduce the taxable income of individual partner to that extent and worked out the interest of capital contribution of the partner @ 12% and thereby disallowed 1.79 crores and excluded from the deduction under section 10AA - HELD THAT:- In the present case, there is no such loss in the partnership deed for payments pertaining to interest and remuneration to the partners - The assessee has not charged any charge of remuneration to the partners and accordingly, assessee cannot be compared to charge / interest or remuneration to the partner. In view of the above discussion, we do find any infirmity in the order passed by Ld. CIT(A), which we affirm. In the result, this second ground of Revenue is also dismissed.
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