Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2005 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2005 (12) TMI 212 - AT - Income TaxDeduction u/s 80IB - Profits derived from Unit-I i.e., the NH coke unit - Goods exports to sister concern - 'market value' - Whether, taking into consideration the fact that the impugned goods are import substitute and no other unit manufactures NH coke in India, the landed cost (import value) thereof would be indicative of the market value in terms of the Explanation appended to s. 80-IA(8) for the purpose of deduction u/s 80-IB - HELD THAT:- The price at which it actually exported goods to MCCP can in no way be termed as indicative 'market value' in terms of the Explanation to s. 80-IA(8). The price at which the goods were actually exported to MCCP was dictated/imposed by the latter. It is not the price which the impugned product would ordinarily fetch on sale in the 'open market' between a willing buyer and a willing seller. The impugned export transactions were not effected under conditions enabling every person desirous of purchasing the goods to place orders with the manufacturing unit and obtain supplies. As such, the impugned export did not constitute open market transaction. We find that the assessee's claim u/s 80-I was allowed by the Department upto financial year 1998-99 i.e., relevant to the asst. yr. 1999-2000. The assessee had entered into a technical collaboration with the Government for getting approval. As a result of this collaboration, the assessee had to export NH coke in order to pay dividends. The export was made to the company from whom technical collaboration was made. As a result thereof, the assessee-company earned profits whereas previously they had incurred losses. We are of the view that whatever was done by the assessee was based on commercial expediency subject to the Government regulation. We also agree with the view of the learned Authorised Representative of the assessee that the open market price would be that price the assessee could obtain NH coke in the open market. We also note that the Revenue has accepted the orders of the learned CIT(A) and did not come to the Tribunal, when similar matters were decided upon in earlier years. After considering all the circumstances and the principles of consistency, we decide the appeal in favour of the assessee on the first ground. The AO is directed to, allow the assessee's claim under s. 80-IB. The order of the learned CIT(A) is set aside and the claim of the assessee is allowed on the first ground. The assessee has also raised the second ground against the order of the learned CIT(A) in confirming a disallowance made by the AO. We find no merit in this ground of assessee's appeal. The order of the learned CIT(A) is confirmed and the appeal of the assessee on the second ground is dismissed. In the result, the assessee's appeal is partly allowed.
|