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TMI Blog2012 (8) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of warehouse charges Rs. 15,00,000/-. 3. That the ld. CIT(A) erred in maintaining disallowance of Rs. 36,480/- u/s 40A(2)(b). 3. Rival contentions have been heard and records perused. Facts in brief are that the assessee is a company engaged in the manufacturing & trading in commodities, during the year under consideration sales are shown at Rs. 9,38,11,64,434/- net profit after tax for the year has been worked out as per books at Rs. 43,31,58,169/-. During the course of assessment, the assessee was asked to furnish detail of closing stock, as well as purchase during the year both in terms of quantity as well as average purchase price. On the basis of submission made by the assessee, the Assessing Officer observed that the value of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and production during the year, direct expenditure incurred and the consumption/sales made during the year and the resultant figure of closing stock which has been arrived at as per the FIFO method. In the interest of justice, we restore this ground to the file of Assessing Officer for deciding after considering the detailed calculation of stock as per FIFO method filed by the assessee. We direct accordingly. The Assessing Officer has also made an addition on account of ad hoc disallowance of warehousing charges by invoking provisions of Section 80IB(13) and Section 40A(2). As per the Assessing Officer, since the payment has been made to the sister concern income of which is exempt u/s 80IB, therefore, to the extent of exemption availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered unreasonable on account of provision of Section 80IB(13) was 80IA(8) and 80IA(10) of the Income-tax Act, 1961. Provisions are reproduced here for ready reference. " 6. By the impugned order, the ld. CIT(A) confirmed the action of the Assessing Officer 7. We have considered the rival contentions. There is no merit in the action of the Assessing Officer for making disallowance on the plea that sister concern of the assessee is availing exemption u/s 80IB. Any excess payment made to the sister concern can be disallowed where the payment so made for the services are found to be in excess of the fair market value. Thus, such disallowance can be merely made on the basis of provisions of Section 40A(3) by comparing the amount paid to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has given detailed calculation of payment made to the sister concern on account of purchases made with reference to the market rate prevailing on the date of purchase. Nothing was brought on record to dislodge the finding of the Assessing Officer. Accordingly, we confirm the disallowance made on account of purchase made from sister concern under provisions of Section 40(a)(ii)(b). 10. Before us, the assessee has also raised additional ground for reworking of assessee's claim of depreciation, in view of the disallowance of assessee's claim of depreciation in the assessment year 2007-08. 11. This ground was not before the Assessing Officer, therefore, in the interest of justice, we restore this ground back to the file of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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