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TMI Blog2015 (3) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of CIT(A) inasmuch as the alleged close relation of assessee and Ranbaxy does not exist. In the absence of establishing such relationship assessing officer has no justification to tinker with the computation of 80IC claim on assumptions and presumptions. The books of account of both the units are separately managed. In view thereof we uphold the order of CIT(A). CIT(A)didnot erred in directing the AO to delete the disallowance of ₹ 20,39,591/- u/s 80IC. - Decided against revenue. Inclusion of amount on sale of scrap in the computation of deduction u/s 80IC - Held that:- CIT(A) in his order has relied on the ratio of decision of Hon’ble Delhi High Court in the case of Sadhu Forging Ltd. ( 2011 (6) TMI 9 - DELHI HIGH COURT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on the facts and circumstances of the case and in law, the Ld. CIT(A) has not appreciated the decision of the Hon ble Madras High Court in Pandian Chemical Ltd. vs. CIT 254 ITR 562 and erred in including the sale of scrap amounting to ₹ 6,62,184/- for computation of deduction u/s 80IC of the I.T. Act. 3. First ground in both the appeals is common. Brief facts are: The assessee is engaged in the business of manufacturing and trading in pharmaceutical products. During the course of assessment proceedings the assessing officer found that Baddi unit (Himachal) of the assessee which was exempt u/s 80IC was claiming more profits on the same products as compared to Delhi unit. Relevant queries were asked. In response, the assessee sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 respectively. Exorex lotion 50 ml. was for physician sample, which was not for sale. The assessee company had invested its funds in putting up a new manufacturing facility at Baddi which was an Excise Free Zone for a period of 10 years. On getting the goods manufactured at Baddi, the correct manufacturer loan licensee was saving a substantial amount by way of excise duty. In view of the investment made by the assessee company in its new facility at Baddi and the excise duty saving to the contractor, the assessee company renegotiated the upward processing charges for manufacturing the products on loan license basis at Baddi which are at arm s length. It is confirmed that M/s Ranbaxy Laboratories Ltd. is a public limited company, which is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see....... and any other person, or any other reason, the course of business between them is so arranged that the business transacted between them produced to the assessee more than the ordinary profits which might be expected to arise in such eligible business ..... In the instant case, the AO has failed to establish any of the above pre-requisites, viz. close connection, course of business being d, more than the ordinary profits, for invoking the provisions of the above section. On the contrary, as pointed out by the Id. AR, RLL is a public limited company having a huge turnover and large number of shareholders. It has no common directors shareholders with the appellant company. As such, there is no close connection between the as envisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave already allowed the main grounds of appeal on this issue, this ground has become infructuous and no longer survives. The same is, therefore, rejected . 3.3. Aggrieved, revenue is before us. 4. Ld. DR relied on the order of assessing officer. 5. Ld. Counsel for the assessee contends that the facts are self speaking. The assessee and Ranbaxy are not related concerns. Books of a/cs of Baddi and Okhla units are separately maintained and not rejected. When the books of account are upheld, there is no justification for assessing officer in reducing the claim on assumptions and presumptions. Order of CIT(A) is relied on. 6. Apropos second ground it is proposed that it is misconceived by the revenue as the same has been rejected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ld. Counsel for the assessee on following judgments: - Aarti Industries Ltd. Vs. DCIT 95 TTJ 14 (Ahd.); - M/s R.N. Gupta Co. Ltd. Vs. CIT(A) (2013) (1) TMI 626 (P H); - CIT Vs. M/s Micro Turners (2011) 11 TMI 442 (P H); - CIT Vs. M/s TTG Industries Ltd. (2012) (6) TMI 262 (Mad.) - Fenner (India) Ltd. Vs. CIT (2000) 241 ITR 803 (Mad.). 7. We have heard rival contentions and gone through the relevant material available on record. Apropos first issue i.e. allowance of deduction u/s 80IC as claimed by the assessee, we find no infirmity in the order of CIT(A) inasmuch as the alleged close relation of assessee and Ranbaxy does not exist. In the absence of establishing such relationship assessing officer has no justifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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