9911796707
TMI Blog2018 (11) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be a dispute, assessment of each year is required to be independently carried out on the basis of material before the AO. The authorities below failed to consider compliance of essential ingredients required for invocation of the said provisions. AO as also other authorities proceeded on the presumption that since in the preceding years the assessee admitted deduction to the extent of 10%, hence, in future also assessee would continue to be bound by the same. This, in our considered view, is not a reasonable approach adopted by the authorities, for each case of the assessee has to be considered independent of the each assessment year and not on the basis of assessment carried out in the preceding year. The approach adopted by the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 (Annexure A-1), the Deputy Commissioner of Income Tax, Circle, Shimla, H.P., found the assessee to have close connection with another concern i.e. M/s Stoneage Industrial Diamond Product, also partnership concern of Sh.Devi Prasad Gupta, sole proprietor of the assessee M/s Shree Tools, thus, by applying the principle of Section 80IA(10) of the Income Tax Act, 1961 (hereinafter referred to as the Act), assessed the income of the assessee by reducing the net profit by 10% (5% for use of technical knowhow, customer base and 5% towards goodwill). 3. Subsequently, appeal preferred by the assessee stood dismissed vide order dated 22.01.2013, passed by the Commissioner of Income Tax (Appeals), Shimla, H.P., in Appeal No.IT/442/2010-11/SML (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has to be considered independent of the each assessment year and not on the basis of assessment carried out in the preceding year. The approach adopted by the authorities below is erroneous and perverse. 8. Thus, we quash and set aside the orders dated 14.12.2010 (Annexure A-1), passed by the Deputy Commissioner of Income Tax, Circle, Shimla, H.P.; dated 22.01.2013, passed by the Commissioner of Income Tax (Appeals), Shimla, H.P., in Appeal No.IT/442/2010-11/SML (Annexure A-2); and dated 23.06.2016 (Annexure A-4), passed by the Income Tax Appellate Tribunal, Chandigarh, in ITA No.316/CHD/2013, titled as Shri Devi Prasad Gupta vs. The DCIT, Circle Shimla, and remand the matter back to the Assessing Officer for consideration afresh. Par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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