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2023 (9) TMI 735 - AT - Income TaxProfit of eligible unit by on account Baggase Purchase u/s 80-IA(8) r.w.s. 80-IA (10) - Assessee’s manufacturing unit has sold “bagaase” to assessee’s power unit at Rs. 1600/- per metric ton. - - price charged by Khandsari manufacturing unit of Baggase to Power Unit is as per the Market rate prevailing in the relevant area and quality of Baggase - HELD THAT:- It is an admitted position that assessee’s manufacturing unit has sold “bagasse” to its power unit at Rs. 1600/- per metric ton. As observed that “bagasse” has been sold by the assessee to Independent Third Parties at Rs. 1400/- per metric ton. In the assessment order and in the ld.CIT(A)’s order, both these authorities have not given any reason, why the rate at which assessee has sold “bagasse” to independent parties shall not be considered as market rate for the purpose of section 80IA(8). We are of the opinion that when assessee has sold “bagasse” to third parties at Rs. 1400/- per metric ton, the said rate of Rs. 1400/- per metric ton is “market rate” qua assessee. Because, the same “bagasse” is sold to third party by the assessee and to its own unit. Therefore, the quality of the “bagasse” sold to third party by the assessee and to its own unit is same. Thus most appropriate market rate is the rate at which assessee itself has sold “bagasse” to third parties. As observed that assessee has sold “bagasse” at “Market Rate” to its eligible unit. Therefore, AO has erred in recalculating the profit of eligible unit i.e. power unit, as per section 80IA(8). Therefore, the Assessing Officer is directed to delete the addition made on account of difference in the rate of “bagasse” - Assessee appeal allowed.
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