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2011 (8) TMI 620 - AT - Income TaxDeduction u/s 80IB - applicability of Eleventh Schedule - held that:- With regard to revenue's claim that assessee is producing articles or things specified in Eleventh Schedule, we hold that units set up in backward states specified in Eighth Schedule will not attract the applicability of Eleventh Schedule. The units have been allowed deduction u/s 80IB in the preceding years. In the result, we allow grounds of appeal related to claim of deduction u/s 80IB of Income-tax Act. - Decided in favor of assessee. Benefit of carry forward of losses of amalgamated company for the period prior to the amalgamation. - held that:- provisions of section 72A are applicable when the amalgamating company is engaged in the business and have accumulated loss or unabsorbed depreciation. - Provisions of section 78 and 79 are not applicable to the assessee - Decided in favor of assessee. Arms length adjustment in respect of international transactions - Cost plus method - held that:- We agree with the view of the TPO that two clearly comparable segment are available within financial results of the assessee company which is the tested party. Hence a more direct and proximate comparable is available internally. Thus, internal Cost Plus Method used by the TPO taking GP/Direct Cost of production as the PLI is justified. Hence, the assessee's objections are rejected. - Taking all material into consideration and giving due weightage to the relevant factors as stated above including small market and credit risk, we direct to adopt 60% as profit margin mark-up on the direct cost. In view of these, grounds of the assessee are partly allowed.
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