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2017 (3) TMI 968 - AT - Income TaxDisallowance of discount charged on the ground of alleged transfer of profits to associate concerns - Held that:- From the perusal of the average rates calculated from the two charts wherein one relates to job rate work charged to sister concerns and the other to the outside parties we observe that the average rates in both the cases is ₹ 71 per carat. In order to examine the reasonableness of the rate of job work charges charged to the sister concerns the same can be compared with the other comparables in the form of job work rate charged to outside parties and we find that the average rates charged to the sister concern are at par with the average rate charged to outside parties. We also find that with the total diamond processed for the associated concern is 217024 carats for which the assessee has realized ₹ 16029035/- and if we calculate the average rate per carat charged to associate concerns it comes out to ₹ 73.86 per carat which is higher than the average rate of ₹ 71 calculated above. We are, therefore, of the view that in the given facts and circumstances of the discussion made above, net job work rates (after providing discount) charged by the assessee to its associate/sister concerns are reasonable with regard to the fair market value of the services. We, therefore, delete the impugned disallowance sustained by ld. Commissioner of Income Tax(A). - Decided in favour of assessee
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