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2012 (12) TMI 978 - ITAT MUMBAIDisallowance under section 40A(2)(b) - labour charges paid by the assessee to its vendor at Deesa - Held that:- Neither the assessee has provided any comparable rates to the revenue authorities nor the revenue authorities have made any attempt either by asking the assessee to provide for the comparable nor they suo moto collected any data from the market. What the revenue authorities have done is that they have relied on the internal comparable only to arrive at a figure of estimated charges per carat. In fact, the AO should have collected independent data or have asked the assessee to provide comparable periodic rates prevailing in the market at Deesa to set the bench mark. This exercise has not been done by the AO or by the CIT(A), which according to us, the revenue authorities should have done to arrive at some definite estimate. In these circumstances, we are of the opinion that in the interest of justice to both the sides, the AO must make enquiries and examine the comparable rates from the third parties at Deesa and then benchmark the average job work rate for the financial year in question and compute the job work charges.We, therefore, set aside the order of the CIT(A) on the issue of addition of ₹ 43,97,624/- with the above direction to the AO, who shall afford adequate and reasonable opportunity to the assessee to present its case. - Decided in favour of assessee for statistical purposes.
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