Tribunal grants partial relief to assessee, allowing challenges on deduction claims and disallowances.

The Tribunal allowed the appeal of the assessee in part. The challenges against the reduction of claims under sections 80-I and 80HHC, disallowance of telephone expenses, and disallowance of proportionate premium on redemption of debentures were successful. The Tribunal directed the Assessing Officer to adjust profits under section 80-I based on percentage differences in transfer prices, following past precedents, ultimately granting relief to the assessee on these issues.

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Issues:
1. Reduction of claim under section 80-I
2. Adjustment in relief claimed under section 80-I
3. Reduction of claim under section 80HHC
4. Disallowance under section 43B
5. Disallowance of telephone expenses
6. Disallowance of proportionate premium on redemption of debenture

Reduction of claim under section 80-I:
The Assessing Officer reduced the deduction claimed by the assessee under section 80-I due to goods being transferred by other units at prices below market value. The assessee's appeal was dismissed by the Commissioner of Income-tax (Appeals). However, the Tribunal found that the facts were similar to previous cases where relief was allowed due to insignificant differences in transfer prices. The Tribunal directed the Assessing Officer to adjust profits under section 80-I based on the percentage difference, as done in previous years, ultimately allowing the appeal on this issue.

Adjustment in relief claimed under section 80-I:
The Tribunal reviewed the percentage difference in transfer prices and directed the Assessing Officer to adjust profits under section 80-I based on past precedents, allowing the appeal on this issue as well.

Reduction of claim under section 80HHC:
The Assessing Officer included CST and ST in the turnover for computing deduction under section 80HHC, contrary to the accounting method followed by the assessee. The Tribunal referred to a previous judgment and directed the Assessing Officer not to include CST and ST in the turnover for computing the deduction, thereby allowing the appeal on this ground.

Disallowance of telephone expenses:
The Tribunal ruled in favor of the assessee, citing a previous order that disallowance cannot be made for telephone facilities provided at directors' residences for business purposes. The addition of Rs. 9,061 was deleted, and the appeal was allowed on this issue.

Disallowance of proportionate premium on redemption of debenture:
Both parties agreed that this issue was covered by a Supreme Court decision and a Tribunal decision. The Tribunal upheld the disallowance of proportionate premium payable on redemption of debentures, in line with the previous decisions, dismissing the appeal on this ground.

In conclusion, the appeal of the assessee was partly allowed, with successful challenges on the reduction of claims under sections 80-I and 80HHC, disallowance of telephone expenses, and disallowance of proportionate premium on redemption of debentures.

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