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2023 (5) TMI 358 - AT - Income TaxEstimation of income - Bogus purchases - HELD THAT:- As noticed earlier that the manufacturing loss declared by the assessee was less than the SION standards prescribed by DGFT. Gross profit rate declared by the assessee was more than the industry average. Hence, in the normal circumstances, no disallowance of purchases is called for. Since some of the suppliers have stated that they have not supplied the materials and since the AO & DGCEI has opined that the assessee might have procured materials from others, it is possible that the assessee could have made some profit in such an exercise. Hence, in order to take care of revenue leakages, if any, some addition is called for. We modify the order passed by CIT(A) in all these years and direct the AO to restrict the addition on account of non-genuine purchases to 2% of the value of alleged bogus purchases in both the years., TP adjustment - Commission on Corporate Guarantee given to the Associated Enterprises by the assessee - assessee contended before TPO that the same is a Share holder activity and hence it cannot be considered as an International Transaction - TPO made TPA @ 1.50% of the Guarantee amount given by the assessee - HELD THAT:- We notice that Tribunal has examined an identical issue in the assessee’s own case in AY 2010-11 as restricted the rate of commission at 0.50% of the value of loan actually availed by the Associated Enterprises. Tribunal has followed the decision of Everest Canto Cylinders Ltd [2015 (5) TMI 395 - BOMBAY HIGH COURT] Since the decision rendered by Ld CIT(A) on this issue is covered by the decision rendered by the jurisdictional High Court and the Tribunal, we do not find any reason to interfere with the decision so taken by Ld CIT(A) on this issue. Accordingly we uphold the same. Disallowance u/s 37 - assessee has paid salary/professional fees to three persons related to the CFO of the assessee company - HELD THAT:- If the payments made to both Ms Ramita Jain and Mrs Sangitha Jain were considered as part of salary payment to Shri Raman Kumar Jain, then such payments should be considered as having been incurred for the purposes of business only, i.e., all the payments, if clubbed with the salary payable to Shri Raman Kumar Jain, is allowable as business expenditure. Hence, we do not find any necessity to disallow the professional payments booked in the names of Ms Ramita Jain and Mrs Sangitha Jain. Accordingly, we set aside the orders passed by Ld CIT(A) in respect of disallowances of professional fee paid.
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