TMI Blog2015 (12) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... in exempt unit have been inflated. In Section 80IA(10), it is clearly provided that if Assessing Officer has reasons that the business has been so arranged to show inflated profits in eligible unit then Assessing Officer has power to recompute the profits of such eligible unit. As seen from the sale invoice there is definitely a reason to believe that assessee has inflated the profits in eligible unit because the same product is being sold from both the units for almost identical price. In this background, ITAT correctly set aside the order of CIT(A) and restore that of Assessing Officer - Decided against assessee - ITA No. 445 of 2014 - - - Dated:- 20-10-2015 - MR. AJAY KUMAR MITTAL AND MR. RAMENDRA JAIN., JJ. For The Appellant : Mr. Ravi Shankar, Advocate and Mr. B.M. Monga, Advocate For The Respondent : Ms. Urvashi Dhugga, Advocate AJAY KUMAR MITTAL, J. 1. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 19.6.2014 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench B , Chandigarh (hereinafter referred to as the Tribunal ) in ITA No. 1026/CHD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer vide order dated 26.2.2013 (Annexure A-1). The Assessing Officer instead of allowing 100% deduction under Section 80IC of the Act, re-allocated the purchases between exempt and non-exempt units without following the mandate of Section 80IA(10) read with Section 80IC(7) of the Act and made addition of ₹ 55,41,224/-. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The said appeal was partly allowed by the CIT(A) vide order dated 21.8.2013 (Annexure A-2) by deleting addition of ₹ 50,19,196/- made on account of reallocation of purchases. Against the order, Annexure A-2, the revenue filed an appeal before the Tribunal who vide order dated 19.6.2014 (Annexure A-3) set aside the order of the CIT(A) and restored that of the Assessing Officer. Hence, the present appeal by the assessee. 3. We have heard learned counsel for the parties and perused the record. 4. The question that arises for consideration in this appeal is whether the Assessing Officer and the Tribunal were justified in invoking Section 80IA(10) of the Act while denying benefit of Section 80IC of the Act? 5. Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat provisions of sub-section (5) and sub-sections (7) to 12 of Section 80IA are also applicable for considering the claim of deduction under this section. Section 80IA(10) reads as under:- (10) Where it appears to the Assessing Officer that, owing to the close connection between the assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business for the purposes of the deduction under this section, take the amount of profits as may be reasonably deemed to have been derived therefrom. 12. The reading of the above provision clearly shows that if Assessing Officer is of the opinion for any reason if the business is arranged so as to inflate profits of an eligible unit, then the Assessing Officer has the power to compute the profits of eligible unit on reasonable basis. Admittedly, in the case before us, the purchases are made f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. 10.04.2009 M/s Power Soaps Ltd. Soap Wrapping Machine-MDT- 13K 02 525000.00 2. 14.04.2009 M/s Power Soaps Ltd. Soap Wrapping Machine-MDT- 13K 02 525000.00 3. 24.04.2009 M/s Kishoresons Detergent Pvt. Ltd. Soap Wrapping Machine-MDT- 13K 03 500000.00 4. 07.05.2009 M/s Fena Pvt. Ltd. Wrapping Machines-MDT- 13K 02 55000.00 5. 22.05.2009 M/s Kishoresons Detergent Pvt. Ltd. Soap Wrapping Machine-MDT- 13K 02 625000.00 6. 17.07.2009 Divij Detergents and Chemicals Pvt. Ltd. Soap Wrapping Machine-MDT- 13K Change Parts 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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