TMI Blog2012 (8) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... de various types of additions. The assessee preferred appeals before Ld CIT(A), but they were allowed partly. Hence both the parties are in appeal before us on the points decided against each of them. 3. We shall take up the appeals filed by the assessee first. Following issues are common in both the years. (a) Assessment of DEPB benefits. (b) Addition on account of sales made to sister concerns. (c) Addition made in respect of Carton business. (e) Disallowance of claim of deduction u/s 80IB of the Act. 4. The first common issue relates to the assessment of DEPB benefits. This issue has since been settled by Hon ble Supreme Court in the case of Topman Exports Vs. CIT reported in (2012)(247 CTR (SC) 353) (345 ITR 557) and accordingly the Ld A.R prayed that this issue may be set aside to the file of AO for fresh consideration in terms of the decision of Hon ble Supreme court referred supra. The Ld D.R also did not object to the said plea made by Ld A.R. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of AO with the direction to examine the issue of taxability of DEPB in accordance with the decision of Hon ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case no manufacturer would be able to fix the export price for a price sensitive product like cashew. For the purpose of assessment under the Income tax Act, each business entity, even if that be a sister concern, is treated as a separate unit of assessment, the profit or loss of which is to be independently arrived at and assessed. Therefore the contention of the appellant that it is not necessary that the transfer price has to be above the cost of production especially where such sale is to a sister concern cannot be accepted. Also the assessing officer was forced to adopt the average cost because the appellant was unable to furnish details of different grades and their independent cost of production. It has been held in the case of Patel Chemical Works Vs. CIT reported in 265 ITR 273 that a sale to a sister concern at prices much below the market rates was a device for tax avoidance. Therefore, the appellant s case, wherein the sale to a sister concern is even below the cost price, has to be viewed more seriously. In view of the above, I hold that the assessing officer is perfectly in order in his action and therefore the addition of ₹ 23,41,202/- made by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er concern, is treated as a separate unit of assessment, the profit or loss of which is to be independently arrived at and assessed. Therefore the contention of the appellant that it is not necessary that the sale price of cartons has to be above the cost of production especially where such sale is to a sister concern cannot be accepted. It has been held in the case of Patel Chemical Works Vs. CIT reported in 265 ITR 273 that a sale to a sister concern at prices much below the market rates was a device for tax avoidance. Therefore the appellant s case, wherein the sale to a sister concern is even below the cost price, has to be viewed more seriously. In view of the above the addition of income made to the carton unit is sustained . 8. Before us, the Ld A.R reiterated contentions made before the tax authorities. The undisputed fact remains that the assessee has sold the carton boxes to its sister concerns at a rate which was very much below the cost of production. It is not understandable as to how a prudent business man would sell any product at loss. When it comes to the transactions with sister concerns, the natural presumption is that the said arrangement is only to shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d section 148 is not the place to consider any claim of the assessee which will end in any relief to him. This has been clearly pronounced in the case of Commissioner of Income tax Vs. Sun Engineering Works Pvt Ltd reported in 198 ITR 297 (SC). In view of the above I hold that the rejection of the additional claim u/s 80HHC is in order and sustain the same. It can be noticed that the Ld CIT(A) has followed the legal proposition laid down by the Hon ble Supreme Court in deciding this issue against the assessee. The assessee did not show to us any other decision of the Hon ble Supreme Court in support of his claim. Hence, we do not find any reason to interfere with the decision of Ld CIT(A) on this issue. 13. The next individual issue relates to charging of interest u/s 234D of the Act. This issue has since been settled by the Hon ble Jurisdictional Kerala High Court in the case of CIT Vs. Kerala Chemicals and Proteins Ltd reported in 323 ITR 584. Accordingly, we direct the AO to charge interest u/s 234 in accordance with the said decision. 14. In assessment year 2003-04, the assessee is assailing the decision of Ld CIT(A) in holding that the loss from manufacturing s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso accepted by the assessing officer. Accordingly, it was contended, by placing reliance on the decision of Hon ble Supreme Court in the case of Radhasoami Satsang Vs. CIT reported in 193 ITR 321, that the assessing officer was not correct in deviating from the view taken consistently in earlier years, in the absence of any material which justifies the said change. The Ld A.R also placed reliance on the following decision in support of the computations made by the assessee. (a) Glaxo Smithkline Asia (P) Ltd Vs. ACIT (97 TTJ (Del) 108) (b) Surendra Engineering Corpn. Vs. ACIT (78 TTJ (Mum)(SB)347) (c) Order dated 31-01-2007 passed by SMC bench of Cochin ITAT in the case of M/s Poyilakada Trust Vs. DCIT. 5.1 We notice that the SMC bench of the Cochin Tribunal has considered the other two decisions referred supra and has decided an identical issue in favour of the assessee. In the case of Surendra Engineering Corporation, supra, the special bench of the Tribunal has observed as under: The Commissioner (Appeals) view that as per the definition of indirect costs in Explanation (e) below sub section (3), except for the allocation between export turnover in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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