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2023 (7) TMI 997 - HC - Income TaxTP adjustment to the manufacturing income - assessee had benchmarked its transactions using two segments namely manufacturing and indenting but during the TP proceedings, it separated the losses from solar test, arbitrarily to present better margins under manufacturing segment - HELD THAT:- As held in Apollo Tyres Ltd [2002 (5) TMI 5 - SUPREME COURT] A.O. has to accept the authenticity of the accounts. It is not a case of the A.O. that the accounts of assessee have not been scrutinized or certified by statutory auditors or approved by the company in general meeting or has not been filed before the ROC. In fact, Appellant stated that the company should also accept these accounts as much as the A.O. has accepted the accounts of assessee. The Directors note in the Annual Accounts specifically refers to solar trial test and how the activity undertaken did not take off and how having regard to the principles of accounting standard of impairment of assets (AS 28) assessee has made the provisions in respect of such impairment. The auditors have accepted it. The accounts have been approved by the company in general meeting and has also been filed by the Registrar of Companies. Therefore, the ITAT was correct in not interfering with the order of the DRP with regard to computation of PLI. The DRP has correctly held that the ST activity was an extraordinary item and was not part of the regular business of assessee and there was impairment of asset. Set off of brought forward unabsorbed depreciation i.e. for the period prior to amendment in sub section (2) of Section 32 of the Act w.e.f. 1/4/2002 - HELD THAT:- The issue would be covered by the order in the case of Petrofills Co-operative Ltd. [2021 (3) TMI 1092 - SC ORDER] which upheld the order passed by Hindustan Unilever Ltd [2016 (7) TMI 1245 - BOMBAY HIGH COURT] has taken the same view that depreciation should be allowed to be carried forward.
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