TMI Blog2014 (4) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under sub sections (3) to (11), (11A) or (11B) of the Act. The assessee is at liberty to do manufacture for itself or for others, which makes no difference for purposes of section 80IB of the Act. See Commissioner of Income-tax Versus Impel Forge and Allied Industries Limited [2008 (12) TMI 370 - PUNJAB & HARYANA HIGH COURT ] - ITA No.324 of 2013 (O&M) - - - Dated:- 28-4-2014 - MR. AJAY KUMAR MITTAL MR. JASPAL SINGH, JJ. Mr.Rajesh Katoch, Advocate for the appellant. ORDER Ajay Kumar Mittal,J. 1. This appeal been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 29.4.2013, Annexure A-III passed by the Income Tax Appellate Tribunal, Chandigarh Bench A Chandigarh (in short, the Tribunal ) in ITA No.34/CHD/2011, for the assessment year 2007-08, proposing to raise following substantial questions of law for determination of this Court:- i) Whether on the facts and circumstances of the case, and in law, the Hon ble Income Tax Appellate Tribunal was justified in confirming the action of the learned CIT(A) in deleting the GP addition on account of sales made to sister concern ignori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, ₹ 37,500/- on account of disallowance of additional depreciation and ₹ 7,13,812/- on account of disallowance of expenses in respect of payment of bonus and wages. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals)-I [CIT(A)]. Vide order dated 29.10.2010, Annexure A.II, the CIT(A) partly allowed the appeal, deleting the additions of ₹ 49,97,319/- on account of sales to the sister concern, ₹ 7,13,812/- on account of disallowance of expenses out of bonus and leave with wages and allowing the deduction under section 80IB of the Act claimed at ₹ 2,33,337/-. Aggrieved by the order, the revenue filed appeal before the Tribunal. Vide order dated 29.4.2013, Annexure A.3, the Tribunal dismissed the appeal. Hence the present appeal by the revenue. 3. We have heard learned counsel for the appellant-revenue and perused the record. 4. The two issues that arise for consideration in this appeal are:- (i) Whether the gross profit rate applied by the Assessing Officer at the rate of 20% was appropriate and the CIT (A) as well as the Tribunal were justified in deleting the same in respect of sales made to siste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of ₹ 49,97,319/-. While doing so, the AO has also referred to the case of Safari Bikes which has shown GP of 20.10%. However, the AR has in his submission reproduced about has countered various arguments of the Assessing Officer discussed above. After going through the facts discussed above, I intend to agree with the contentions raised by the AR against increasing the GP in respect of the sales made to sister concern. The Assessing Officer has referred to certain transactions where rates of sale made to sister concern are shown less than the rates of sale made to independent parties. However, the AR has submitted that sale rates made to the sister concern and the independent parties are comparable as noted in the chart given in the submission reproduced above. It appears that Assessing Officer has mislead himself in adopting the rates charged from sister concern during much earlier period and comparing the same with the sale rates of independent parties to whom the sales were made in the months of Feb and March, 2007. The AR has stated that almost all the sales have been made to sister concern from April 2006 to 14th February 2007 whereas the sales to other partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing observations:- 8. We have considered the rival submissions carefully. We find that first of all the assessee is a concern wherein assessee was entitled to deduction under section 80IB of the Act @ 25% which would mean that effective tax rate would be 22.50% whereas the sister concern M/s Darshan Udyog is required to pay tax @ 30%, therefore, there was no incentive to make sales at lower rate. In any case, in the detailed submissions before the Assessing Officer and CIT(A) it demonstrated that practically no sales have been made to outside parties and therefore, comparison is not correct. In any case, the Hon ble Supreme Court in the case of CIT vs. Glaxo Smithkine Asia (P) Limited has clearly held that since there was no provision to make addition on account of receipts which are at less than the fair market value, therefore, such additions are not justified. In these circumstances, we find nothing wrong with the order of learned CIT(A) and we confirm the same. 8. The CIT(A) as well as the Tribunal had recorded that the assessee concern was entitled for deduction under Section 80IB of the Act at the rate of 25% and therefore, the effective rate of taxation was 22.5% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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