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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 ..... han ordinary profit as compared to other companies in similar business. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in wrong inclusion of processing charges of Rs. 1,24,724/- in the amount of Rs. 36,50,576/- for computation of disallowance u/s 80IC as the aforesaid amount was in respect of Okhla unit and not in respect of Baddi unit. 2008-09: "1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has not appreciated the latest decision in the case of Liberty India vs. CIT (2009) 317 ITR 218 and erred in deleting the disallowance of Rs. 7,45,211/- made u/s 80IC of the IT Act by observing it not more than ordinary profit as compared to other companies in similar business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anbaxy Laboratories Ltd. In its Okhla, Delhi unit on which the Excise Duty @ 16.32% on Maximum Retail Price (MRP) was payable at the time of clearance of the goods. The MRP of Exorex lotion-100 ml was Es.174.98 and the MRP of Fluzet Suspension-6-ml. was Rs. 26.30 on which excise duty @ 16.32% (after abetment of 35%) was payable at Rs. 18.56 and Rs. 2.79 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 inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of comparative rate of the products between the old unit in Delhi and the new unit at Baddi. I find that as per the provisions of section 80IC(7) read with section 80IA(10) of the Act, the AO, to be able to invoke the above provisions of the Act, has to first establish that "owing to the close connection between the assessee....... 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition is, therefore, deleted. 6. Grounds No. 6 is directed against wrongly including processing charges of Rs. 1,24,724/- in the amount of Rs. 36,50,576/- for computation of disallowance u/s 80lC as the aforesaid amount was in respect of Okhla Unit and not in respect of Baddi Unit. However, since I have 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of manufacturing. The receipts of sale of scrap being part and parcel of the activity and being proximate thereto would also be within the ambit of gains derived from industrial undertaking for the purpose of computing deduction under Section 80IB." 6.2. Further reliance is placed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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