TMI Blog2024 (4) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. to delete the above disallowance. Addition of duty drawback incentive which is offered for taxation on cash receipt basis in subsequent year - D.R. submitted that the assessee is not aggrieved by this issue and the CIT(A) already given relief to the assessee, hence this ground is liable to be dismissed - HELD THAT:- We find that the Ld. D.R. is correct in stating that the assessee is not aggrieved on this issue and there is already a direction given by Ld. CIT(A) to verify this issue and rectify the assessment accordingly. Therefore this ground raised by the assessee is hereby dismissed - Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Ms. Urvashi Sodhan, A.R. For the Revenue : Smt. Trupti Patel, Sr.D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 21.06.2023 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year (A.Y) 2015-16. 2. The brief facts of the case is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 69678 5 01-09-2014 JW-05/14-15. 1652 150 247800 4956 242844 11 24-01-2015 JW-12/14-15 2700 450 1215000 24300 1190700 13 31-01-2015 JW-13/14-15 900 450 405000 8100 396900 15 10-02-2015 JW- 16/14-15 300 450 135000 2700 132300 Bisphenol 7 02-12-2014 JW- 07/14-15 1478 450 665100 13302 651798 Methyl Benzothiazinc Isopropyl Ester-(IE-II) 3 10-07-2014 JW- 03/14-15 3003 150 450450 9009 441441 4 27-07-2014 JW- 04/14-15 2721 150 408150 8163 399987 6 05-09-2014 JW- 06/14-15 2695 150 404250 396165 9 22-01-2015 JW- 10/14-15 3603 450 1170000 23400 1146600 10 23-01-2015 JW- 11/14-15 1040 450 468000 9360 458640 12 31-01-2015 JW- 14/14-15 520 450 234000 4680 229320 17 28-02-2015 JW- 18/14-15 2340 450 1053000 21060 1031940 Methyl Ester-1 2 05-07-2014 JW-02/14-15 3811 75 285825 5717 280109 8 12-01-2015 JW-09/14-I5 5652 225 1271700 25434 1246266 14 31-01-2015 JW-15/14-I5 1407 225 316575 6332 310244 16 20-02-2015 JW-17/14-I5 2074 225 466650 9333 457317 35367 9267600 185352 9082248 2.3. The Ld AO found that the explanation offered by the assessee is not backed by any cogent credible evidence other than a self-created cost analysis, which is nothing but an afterthought. The plea that lower rate was lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (A) erred in law and on facts in not deleting but setting aside to AO the addition made of Rs. 98,558/- duty draw back incentive though the same amount has been offered on cash receipt basis in the subsequent year. 7. Levy of interest u/s 234B, 234C 234D of the Act is unjustified 8. Initiation of penalty proceedings u/s 271(1)(c) of the Act is unjustified. 4.1. Heard rival submissions and perused the materials available on record including Paper Book and Case Laws compilation filed by the assessee. 5. Regarding Ground Nos. 1 to 4 disallowance of Rs. 44,89,985/- out of total job work charges of Rs. 92,67,600/- paid to sister concern. The Ld. CIT(A) confirmed the above addition on the ground that the above increase was almost 300% of the rate charged during the earlier period, which is to reduce the tax liability by inflating expenses by the assessee. Both the Lower Authorities have not made any verification about the comparable job work rates of similar nature in the trade for the past or in the future period. Thus the Authorities failed to prove the onus of unreasonableness claimed by the assessee. In a similar circumstances the Hon ble Jurisdictional High Court in the case of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges were claimed for deduction under section 37(1) which was allowed - Subsequently, Assessing Officer found that using some space of 'G Ltd.' - Assessing Officer initiated by exercising powers under section 40A(2) and deducted estimated rent of from charges - It was observed that assessee company as well as parent company, were to tax at maximum marginal rate and, therefore, it could not be said that service charge was paid to G at unreasonable rate to evade tax - Whether since revenue could not point out that assessee evaded payment of tax, invocation of section 40A(2) was not valid. 6. Respectfully following the above judicial precedents and the Lower Authorities failed to make comparative study of the job work charges with any third party, therefore A.O. is not correct in making disallowance u/s. 40A(2)(b) of the Act. Thus the disallowance of Rs. 44,89,995/- made by the Lower Authorities are hereby deleted. Thus Ground Nos. 1 to 4 raised by the assessee are hereby allowed. 7. Regarding Ground No. 5 disallowance of Rs. 33,420 at Rs. 2 per Kg for 16710 Kgs. on estimated basis on the job work carried out by M/s. Mictrotech. The Ld. Counsel submitted that M/s. Microtech had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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