TMI Blog2010 (11) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned revisional order on the ground that the Ld CIT without considering the facts of the case reached to a conclusion that the assessee firm has paid truck hire charges to shri Manohar Ramdayal Vyas Prop. Sachin Milk Centre and also invoked the provisions of section 40 (a)(ia) of the Income Tax Act 1961 and has disallowed entire sum of ₹ 41,07,800/-. 2. At the outset of hearing, Ld. A.R. pointed out that an identical issue raised in Ground Nos. 1 to 4 has been decided by the tribunal in favour of the assessee in its case only for the A.Ys. 2003-04 and 2004-05 in ITA Nos. 143 144/PN/2008 vide order dt. 18.6.2010, copy supplied. The Ld. D.R. did not dispute this submission. 3. Having gone through the said order dt. 18.06.2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee firm assessable under Chapter IV-F of the Act. Learned CIT accordingly invoked the provisions of section 263 and held the assessment orders erroneous and prejudicial to the interests revenue. He accordingly set aside the assessment orders with a direction to the A.O. to assess the interests receipt as income from other sources and allowed the claim of remuneration to partners after re-working the book profit after excluding the aforesaid interests receipts On going through the decision of the Tribunal on an identical issue in the case of ACIT Vs. Sheth brothers (supra), we find that the tribunal therein has held that section 40(b) adopts the net profit as shown in the profit and loss account of the firm as the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bar Industrial Company Ltd. Vs. CIT (supra) and CIT Vs. Max India Ltd (supra) relied upon by the learned AR. Ground No. 1 questioning the validity of order passed u/s 263 on the basis that when two views are possible on certain point and A.O. after calling for required information has taken a view as per the provisions of the Act calling for required information has taken a view as per the provisions of the Act recourse cannot be had to the provisions of section263 of the Act, is thus allowed. In view of allowability of ground no.1 there is no need to adjudicate upon on the alternative grounds no.2 to 4 of the appeal. 4. In the present assessment year also, the book profit adopted for purpose of calculating the allowable salary/ remun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raising an identical issue in that case has been accordingly allowed in favour of the assessee. Following the decision taken therein identical issue, we decide this issue raised in Ground Nos. 1 to 4 in favour of the assessee with this finding that the ld CIT was not justified in invoking the provisions of section 263 on the issue holding the assessment order in this regard as erroneous and prejudicial to the interest of revenue. The revisional order in question is thus set aside. The ground nos. 1 to 4 are thus allowed. Ground No. 5 5. The Ld CIT noted that during the F.Y. relvant to thre A.Y. under consideration, the assessee had paid truck hire charges to the tune of ₹ 41,07,800/- to shri Manohar Ramdayal Vyas, Prop. Sac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was only incidental. The agreement entered into between the assessee and supplier was composite as purchase of milk and supply it to the assessee. 7. The Ld D.R. on the other hand, placed reliance on the revisional order. 8. Considering above submissions, especially keeping in mind that the assessee is in dairy business, an agreement was entered into between the assessee and supplier of the milk to purchase milk, we are of the view that purchase of milk was predominant factor in the transaction and not the hiring of truck to transport the same as the assessee. Since the predominant factor in the contract was sale of milk, the contract cannot be turned as for carrying out any work to invoke the provisions of Section 194C of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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