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2020 (4) TMI 118 - AT - Income TaxDisallowance u/s 10AA in respect of SEZ- Unit -1 - AO examined the manner of allocation of common expenses between the 3 units owned by the assessee - AO was of the view that certain common expense have been booked under STPI unit where here no deduction u/s 10AA of the has been claimed, thereby reducing the profits of non-10AA units (taxable units) and increase the profits of exempted unit, apparently, with the objective of claiming higher exemption - HELD THAT:- Considering the Revenue model of cost + mark-up adopted by the assessee, as rightly pointed out by the assesee, it will not gain anything by under booking expenses in the exempt unit, since the under-booking of expenses would result in corresponding reduction in Revenue also. In any case we noticed that the AO has asked the assessee to reallocate the common expenses only by entertaining surmises and conjectures and not based on any creditable defect noticed by him. Hence, we are of the view that there is no reason to interfere with the order passed by the ld CIT(A) on this issue. TP Adjustment - Selection of comparable - CIT- A seeking exact comparability, which searching for comparable companies of the assessee under TNMM - HELD THAT:- We have gone through the orders passed by ld CIT(A) and grounds taken by the Revenue. We find merit in the submissions made by the ld AR. Accordingly we reject the transfer pricing grounds urged by the Revenue holding that they do not emanate from the order passed by the ld CIT(A).
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