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2016 (4) TMI 1092 - AT - Income TaxDisallowance under sec. 40A(2)(b) - whether assessee had unreasonably paid higher amount regarding purchase of guar gum from related parties? - Held that:- Sec. 40A(2)(a) provides that where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person referred to in clause (b) of this sub-section, and the Assessing Officer is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction. We find that no material was brought on record by the Assessing Officer to show that on the date of purchases made by the assessee from the sister concern, the market price of the goods was lower than the amount paid by the assessee to its sister concerns. In absence of the same, we find that the addition made has righty deleted by the Commissioner of Income Tax (Appeals) and calls no interference from us. - Decided against revenue Disallowance of trading loss - Held that:- No material was brought on record by the Departmental Representative to controvert the finding of the Commissioner of Income Tax (Appeals) that the Assessing Officer has accepted the profit of ₹ 7,96,81,577/- in respect of manufacturing activity and at the same time, has disallowed loss in respect of traded goods without bringing on record any material. All the purchases & sales were recorded in terms of quantity and value and were supported by bills and vouchers and no adverse material or evidence was noticed to show that the assessee firm has inflated any sales or purchases. Further, all the related parties, covered under sec. 40A(2)(b) are assessed to tax at the maximum rate of tax as that of assessee and as such the very presumption for diversion of income is erroneous and as such the addition made by working trading loss at ₹ 2,80,09,637/- is erroneous and is deleted. Therefore, we find no good reason to interfere with the order of the Commissioner of Income Tax (Appeals)- Decided against revenue Deduction under sec. 80IA without setting off of unabsorbed depreciation of eligible unit - Held that:- The disallowance of deduction under sec. 80IA was made by the Assessing Officer in order to keep the issue alive as the department did not accept the order of the Tribunal and has filed appeal there against in the High Court. She admitted that the issue was covered in favour of the assessee by the order of this Tribunal in assessee’s own case for the Assessment Year 2009-10.)- Decided against revenue
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