Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2006 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (3) TMI 225 - AT - Income TaxDeduction u/s 80-IA - Profits And Gains From Industrial Undertaking - HELD THAT:- As noted in the order of the AO as well as in the order of the learned CIT(A), the printing work was being done by unit 4 of the assessee-company for unit 1 at fixed rates and the claim of the assessee that the said rates were even lower than the market rates was not rebutted/refuted by the AO by bringing any material on record. As rightly contended by the learned counsel for the assessee before us, the expenditure on marketing and distribution of the publications was entirely required to be done for the business of publishing house i.e. unit No. 1 and the same was not connected with the printing business of unit 4. It appears that all these material and relevant aspects, however, (were) simply brushed aside by the AO and he proceeded to reject the book results of unit 4 shown by the assessee merely on the basis that the profit margin shown by the assessee in respect of the said unit was higher at 62 per cent as against profit margin of 10 per cent shown in respect of other units of the assessee. In our opinion, this action of the AO was not sustainable in law in the facts and circumstances of the present case including especially the fact that no material or specific defects were pointed out by him in the books of account maintained by the assessee in respect of unit 4 and there was nothing brought on record by him to show that the profit margin of 62 per cent shown in the said books was actually lower. On the other hand, such higher profit margin in respect of unit 4 was satisfactorily explained by the assessee-company and having satisfied with such explanation, the AO was directed by the learned CIT(A) to allow the deduction claimed by the assessee u/s 80-IA of the Act on the book results of unit 4. Thus, we are of the view that the relief allowed by the learned CIT(A) on this issue to the assessee was fully justified and there being no infirmity in the impugned orders of the learned CIT(A) allowing such relief, we uphold the same. In the result, the appeals of the Revenue for AY 1998-99 and 1999-2000 are dismissed.
|