9911796707
TMI Blog2024 (6) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the amount of deduction u/s 10A of the Act. Even if profit of business is increased there will be no change in the return taxable income of the assessee. The said ratio has been laid down in the case of CIT Vs. Gem Plus Jewelers India Ltd. [ 2010 (6) TMI 65 - BOMBAY HIGH COURT ] and the same has been clarified in CBDT Circular No. 37/16 dated 02/11/2016. Thus we hold that the Ld. Assessing Officer committed error in not allowing the deduction u/s 10A of the Act on account of enhanced business profit. Decided in favour of assessee. Addition on account of diversion of profit and unexplained expenditure - DR submitted that the Ld. CIT(A) committed error in deleting the addition by ignoring the fact that the A.O. has referred the matter to the TPO for determining the Arms Length Price of the assessee transaction with iEnergizer Holding Ltd., though the TPO found that the transaction between the assessee and iEnergizer Holding Ltd. having been carried out at Arm s Length Price, the A.O. is having every right and duty bound to test the genuineness of the transaction - HELD THAT:- Though the TPO has opined that the transaction between the A.O. and the TPO are at Arm s Length, but the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 2008-09 to 2010-11 in the case of Granada Services Pvt. Ltd. for Assessment Year 2010-11 in the case of iServices India Pvt. Ltd. The assessees herein have filed the C.Os. against the said orders of the Ld. CIT(A) by challenging the jurisdiction of the A.O. u/s 153A of the Income Tax Act, 1961 ( Act for short) and also challenged the action of the Ld. A.O./CIT(A) not allowing deduction u/s 10A on account of enhanced business profit. 2. The common Grounds of Appeal raised by the Revenue except difference in amount are as under:- 1. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in deleting the addition of Rs. 4,22,99,093/- made by Assessing Officer on account of diversion of profit. (a) The order of the Ld. CIT (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. Deputy Commissioner of Income Tax Central Circle-19, New Delhi. The common Grounds raised by the Assessees in C.Os except difference in amount are as under:- 1. On the facts and circumstances of the case and in law, the addition of Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its income tax return filed u/s 139 on 26.9.2008 and requested the Assessing Officer that the same may be treated as return filed in compliance to notice issued u/s 153A. In the original return filed u/s 139 of the I. T. Act, 1961, the appellant declared an income of Rs. 1,02,519/- under the normal provisions of the I. T. Act, 1961 and a book profit of Rs. 19,57,09,369/- as per the provisions of u/s 115JB of the I. T. Act, 1961. Subsequently, notices u/s 143(2), 142(1) and a detailed questionnaire and show cause notice were issued to the appellant. In response to the same, the ARs of the appellant attended the assessment proceedings and filed necessary details, information and documents called from time to time, which were considered by the Assessing Officer. Thereupon, the assessment was completed in terms of order u/s 143(3) r.w.s 153A of the I. T. Act, 1961 dated 30.3.2015 wherein although the book profit declared as per the provisions of section 115JB was accepted but the income of Rs. 1,02,519/- declared by the appellant under the normal provisions of Income Tax Act, 1961 was computed at Rs. 4,46,57,910/-. 7. The Ld. A.O. has made similar additions for the A.Y 2008-09 to 2010- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Gem Plus Jewelers India Ltd. (330 ITR 175) (BOM) and the same has been clarified in CBDT Circular No. 37/16 dated 02/11/2016. Considering the above facts and circumstances and following the ratio laid down in the case of CIT Vs. CIT Vs. Gem Plus Jewelers (supra), we allow the Ground No. 2 of the Cross Objection filed by the assessee and hold that the Ld. Assessing Officer committed error in not allowing the deduction u/s 10A of the Act on account of enhanced business profit. Accordingly, the Ground No. 2 in the Cross Objections filed by the Assessee are allowed. 12. In the result, Cross Objection Nos. 428,429, 430 425/Del/2015 are partly allowed. 13. Since we have allowed the Cross Objections filed by the Assessees, the Appeals filed by the Revenue in ITA Nos. 5375, 5376,5377/5372/Del/2015 have become in-fructuous, accordingly, the Appeals filed by the Revenue are dismissed. ITA No. 5378/Del/2015 ITA No. 5379/Del/2015 (Revenue) 14. In both the above appeals the solitary ground raised by the Revenue is against the deletion of the addition made by the A.O. on account of diversion of profit. These two years being Assessment Year 2011-12 and 2012-13 are not covered u/s 10A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f 01/04/2010, as a result of which the income of the assessee earned from iEnergizer Holding Ltd. reduced as compared to the income earned up to the year end. During the assessment proceedings the A.O. doubted the Arm s Length of the transactions entered into with iEnergizer Holdings Ltd. and as per the A.O. the assessee diverted its profit to iEnergizer Holdings Ltd. It was the case before the A.O. by the assessee that there was no diversion of income and that the assessee had fully accounted its income the A.O. made reference to TPO for determining the Arms Length Price of the Assessee s transaction with iEnergizer Holding Ltd. The TPO made enquiry incompliance with the reference made by the A.O. and the Ld. TPO found that the transactions between the assessee and iEnergizer Holdings Ltd. having been carried out at Arm s Length Price. The TPO did not find anything adverse in the transaction, though the TPO passed order finding that the transactions are at Arm s Length, the A.O. ignored the order of the TPO and proceeded with his own methodology and made the addition. It is the case of Ld. Departmental Representative that the A.O. has referred the matter to the TPO only to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
