TMI Blog2010 (4) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... n in respect of non-recoverable advances; we therefore, confirm the addition made by the AO – In favor of revenue Lease premium written back from ‘eligible profits’ for deduction u/s 80IB. – assessee pleaded that the same is to be allowed, if the expenditure was debited to the P&L account in the earlier years – Held that:- This aspect has not been considered by the AO - assessee also argued that this issue has been decided in favour of the assessee in assesee’s own case for assessment year 2001-02 and 2003-04 - issue in respect of the ‘lease premium written back’ to the file of the AO - assessee is also directed to file the P&L account of the respective years, if any in which the said expenditure was debited. Restriction of deduction u/s 80HHC invoking section 80IB (13) r,.w.s 80IA(9) of the Act – Held that:- Assessee fairly submitted that this issue has been decided against the assessee in asseesse’s own case - issue is decided against the assessee and accordingly, the ground of the assessee is dismissed – against assessee - ITA No. 4865/Mum/05 & CO. NO. 108/Mum/07 - - - Dated:- 19-4-2010 - SHRI J SUDHAKAR REDDY, SHRI R S PADVEKAR JJ. Assessee by: Shri Rajan Vor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors which was Rs.78,000/- while working out the eligible deduction. The AO, therefore, along with reducing certain other items also reduced the interest received from the debtors and worked out the eligible profit for the purpose of section 80IB of the Act. The assessee challenged the said disallowance before the ld CIT(A) and found favour. Now, the revenue is in appeal here before us on some selected issues. We have heard both the parties. 4 After examining the facts, the ld CIT(A) has observed that the interest received from the debtors of Rs. 78,000/- is inextricably linked with the industrial undertaking and hence, it should be considered as eligible deduction u/s 80IB. The ld CIT(A) also relied on the decision of the ITAT Delhi Bench of the Tribunal in the case of Galium Equipments - 79 ITD 41 (Del-TM) and in the case of Concept Pharmaceuticals P Ltd.- 73 ITD 174(Mom). 4.1 In the case Concept Pharmaceuticals (supra), the issue was in respect of deduction u/s 80HHC. One of the controversies was in respect of interest received from the debtors. The Tribunal held that interest received from the debtors is having direct nexus with the assessee s business and therefore, same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has adopted Comparable Uncontrolled Price (CUP) for determining ALP of the said international transaction. The DETPCL is used as a raw material for the production of Quinalphos which is used in the formulation of products. The TPO has given the details of import of DETPCL in his order at page 8 and thereby noted that the assessee has imported 3,99,900 kg of DETPCL in the year. The part of DETPCL was imported from Cheminova A/S as well as other non associated concerns. The total import of DETPCL from Associated Enterprise (AE) was 315,900 kg and the average price paid was US$ 2.023 per kg. In respect of the import of DETPCL from other non-Associated Enterprise as noted by the AO, the average price paid by the assessee was worked at US$1.582. 9.3 The assessee filed the data of uncontrolable transactions in respect of DETPCL. The assessee has also reference of a chemical weekly, which is a magazine published by Sevak Publications in Mumbai and pertains to the details of chemical imported through Mumbai Port. There is a difference in import of DETPCL by AIMCO Pesticides Ltd which has purchased 7.50 tonnes of DETPCL at the rate of Rs.119.69 per kg. 9.4 The TOP tried to ascertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using Chinese origin DETPCL in latter part of the year. Now, the revenue is in appeal here before us. 10 We have heard the rival submissions of the parties. As stated herein above, there is no dispute about the fact that both the parties have agreed on the CUP method to be adopted for determination of the ALP. It appears that the AO has given more importance to the imports made by the assessee from China as the assessee had paid lesser price to Chinese DETPCL though the purity percentage was quite high or equivalent to the purity given by the AE of the assessee in Danmark. 10.1 The ld counsel of the assessee took us through the Paper Book and submitted that TPO cannot pick and choose only the favourable data to the revenue for determine the ALP, discarding the other data or comparable transactions of uncontrolled enterprises are available. The ld counsel also argued that the AO has not given any importance to the fact that DETPCL is the very important raw material which are mainly used in the formulation process and when China entered into the market at that time, the assessee was not sure about the quality standards of the available DETPCL of the Chinese origin. He has argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion but to agree with the findings of the ld CIT(A); accordingly, we confirm the same. 15 Now, we will take the Cross Objection filed by the assessee. 16 First issue is in respect of disallowance of ESIC contribution of Rs.4,148/- paid after the due date but before filing of returns. We have heard the parties. 17 We find that the issue stand covered in favour of the assessee by the decision of the Supreme Court in the case of CIT vs Alom Extrusions Ltd - 319 ITR 306. We therefore, respectfully following the ratio decidendi of the said decision, delete the addition made by the AO in respect of ESIC contribution and the respective ground is allowed. 18 Next issue is in respect of disallowance of amortisation of lease premium paid on the plot taken on lease from GIDC of Rs.4,12,261/- We have heard the parties. 19 The ld counsel of the assessee was fair enough to submit that this issue is covered against the assessee by the order of the Tribunal in assesee s own case for assessment year 2001-02 and 2003-04 being ITA No.1996/Mum/05 and CO no.290/Mum/07 dated 29.7.2009 and ITA No.5152/Mum/06 and CO no.24/M/07 dated 14.7.2009. The ld counsel of the assessee filed the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ground no.4 is allowed for statistical purpose. 25 So far as ground no.5 is concerned, it is in respect of (i) reduction of interest from bank at Rs.5,68,000/- (ii) interest on ICD at Rs. 1,07,000/- (iii) Miscellaneous income at Rs. 90,000/- and (iv) lease premium written back of Rs.20,15,000/- from eligible profits for deduction u/s 80IB. 26 So far as the first three issues are concerned, the said issues are not pressed by the ld counsel and in respect of 4th issue, i.e. lease premium written back, the ld counsel pleaded that the same is to be allowed, if the expenditure was debited to the P L account in the earlier years. The ld counsel further pleaded that this aspect has not been considered by the AO and hence, this issue may be set aside to the file of the AO to verify and allow the same on factual position. The ld counsel of the assessee also argued that this issue has been decided in favour of the assessee in assesee s own case for assessment year 2001-02 and 2003-04 and saitable directions may be given to the A.O. to considere said decision. The ld DR has no objection for setting aside the issue as pleaded by the ld counsel. We, therefore, set aside the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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