9911796707
TMI Blog2010 (11) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 16,03,84,020. The Assessing Officer noted that the assessee has claimed deduction under section 80-IB of the Income-tax Act, 1961 (the Act) in respect of its industrial unit and deduction under section 80HHC in respect of its export business. The assessee was asked to show cause as to why deduction under section 80HHC shall not be computed after excluding the amount received on sale of DEPB Rs. 1,51,93,915 and the interest on Income-tax refund Rs. 27,92,000 in view of the amendment by the Taxation Laws (Amendment) Act, 2005. The Assessing Officer after considering assessee's explanation that the assessee is eligible for deduction on transfer of DEPB under section 80HHC as the assessee fulfilled both the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 7,28,865 under section 92CA(3) he held that there is no case for adjustment of Rs. 7,28,865 and accordingly he deleted the addition made by the Assessing Officer. 3. Being aggrieved by the order of the ld. CIT(A) the revenue is in appeal before us. 4. Ground Nos. 1 to 3 are against the deletion of disallowance of deduction under section 80HHC in respect of sale of profit on DEPB licence. 5. At the time of hearing both parties have agreed that the issue stands covered by the recent judgment of Hon'ble Jurisdictional High Court in CIT v. Kalpataru Colours & Chemicals [2010] 192 Taxman 435 (Bom.) and also agreed that the matter requires to be restored to the file of the Assessing Officer with a direction to reconsider the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther find that the ld. CIT(A) has observed in paras 4.4 and 4.8 of his order as under: "4.4 I have perused the facts of the case, Transfer Pricing Officer's (TPO) order and assessment order thereof on this point. It is observed that the appellant had supplied the gate, globe and check valves to its AE amounting to Rs. 2,13,64,571. The primary business of the AE is sourcing of valves from the appellant company and marketing them in American markets. The appellant had the confidence to adopt CUP methodology which is the traditional method to justify its Arm's Length. It filed full details, in this regard, before the TPO as well as the undersigned. While passing the order, the TPO ignored this data by dismissing it as general in nature. 4.8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate of the sales made to the AE and then compare it with third parties as against the individual items considered by him. He has been selective in his approach and made the order arbitrary. Had the aggregate of sales made to the AE and that to the third parties been taken into account then the appellant's case squarely falls within 5% tolerance threshold. To my mind, it is appropriate to consider the aggregate sales to AE as against individual items selected arbitrarily. It is not fair for a quasi-judicial authority to pick up those data, which are convenient and suitable to it and ignore the corresponding data which goes against it. Ultimately an order to stand has to have a mark of fairness, reasonableness and judiciousness. Taking ..... X X X X Extracts X X X X X X X X Extracts X X X X
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