Inter-unit transfer pricing for chilled milk was held to be at "market value" where processing units would otherwise have procured from third parties, so treating arm's length price as nil and denying deduction under s.80IB(11A) was unjustified; deduction was allowed, subject to verification that audit reports in Form 10CCB for all eligible units were filed, failing which adverse inferences would not survive. Allocation of profits based on third-party overhead benchmarks was held to yield profits "derived from" eligible chilling units; departmental objection was rejected. Disallowance under s.14A was sustained in principle but capped to exempt income. Differential interest disallowance under s.37 on a concessional advance was deleted due to sufficiency of interest-free funds. s.80JJAA quantification was remanded for verification. - ITAT
Inter-unit transfer pricing for chilled milk was held to be at "market value" where processing units would otherwise have procured from third parties, so treating arm's length price as nil and denying deduction under s.80IB(11A) was unjustified; deduction was allowed, subject to verification that audit reports in Form 10CCB for all eligible units were filed, failing which adverse inferences would not survive. Allocation of profits based on third-party overhead benchmarks was held to yield profits "derived from" eligible chilling units; departmental objection was rejected. Disallowance under s.14A was sustained in principle but capped to exempt income. Differential interest disallowance under s.37 on a concessional advance was deleted due to sufficiency of interest-free funds. s.80JJAA quantification was remanded for verification. - ITAT
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