TaxTMI 
TaxTMI 
2011 (1) TMI 1209
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....rn of income electronically on 25-11-2006, declaring total income of Rs. 2,56,14,300. The AO completed the assessment on 31-12-2008, determining the income at Rs. 23,06,37,110. While doing so, the AO made the disallowances/additions, inter alia, on account of : (a)CENVAT u/s 145(a). (b)Disallowance u/s 14A. (c)Addition on account of transfer Pricing Adjustment u/s 92C(3). Deduction u/s 80-IB was disallowed. 3. The first appellate authority granted part relief. Revenue filed this appeal on the following grounds: 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to make adjustments with reference to opening stock, purchase as well as sales before considering the addition....
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....ground No. 4, Mr. Narendra Singh took this Bench through the order of the AO and submitted that the assessee has chosen to arrive at the weightage average of the enterprise level profits of 13 comparables and then apply such enterprise level average profits to the international transaction to demonstrate that the international transaction is done at the arms length price. He submitted that the entire system adopted by the assessee is legally fouled and unsustainable in law. He submitted that if the profit margins are adopted at enterprise levels, then logically that margin should be applied to the entire lot of transactions i.e. both domestic and international transactions and by adopting a deductive methodology arrived at the ALV. Neverthe....
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.... on the order of the CIT(Appeals). On ground No. 2 he submitted that the CIT(Appeals) was right in holding that the AO was wrong in disallowing the deduction u/s 80-IB on the sole ground that the Chartered Accountant who gave a certificate u/s 44AB is different from the Chartered Accountant who had issued a certificate in Form No. 10CCA for claiming deduction u/s 80-IB. He pointed out that there is no provision in law that the audit of accounts and the issue of certificate in Form No. 10CCA should be done by the same Chartered Accountant. 8. Coming to disallowance u/s 14A, he submitted that the assessee has suo moto disallowed 1% of the dividend earned. He contended that there is no direct expenditure whatsoever, which is identified for ea....
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....ade only to international transactions and not to domestic transactions. Similarly he relied on the decision of I-Bench of the Tribunal in the case of Starline (supra). He also relied on the decision of the Delhi Bench of the Tribunal in the case of IL Jin Electronics (I) (P.) Ltd. v. Asstt. CIT [2010] 36 SOT 227 and pointed out that the Bench has clearly held that applying the operating profit on total sales is not justified and at best it can be applied to the proportionate sales made out of raw material imported from the associated concern. On a query from the Bench, he submitted that the issue whether operating margins at enterprise level can be taken as the margins earned on a transaction or a class of transaction, is not the issue whi....
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....l of the papers on record and the orders of the authorities below as well as the case law cited, we hold as follows. 12. On ground No. 1, the first appellate authority at para 2.4 of his order held as follows : "2.4 I agree with the above judgments of Hon'ble Supreme Court and more specifically in the context of provisions of section 145A, with the judgment of Hon'ble Tribunal in the case of Roha Dye Chem Ltd., and hold accordingly. The AO is accordingly directed to make adjustment in the values of opening stock, purchases as well as sales and compute the net addition or relief to the appellant as the case may be." We uphold these findings and dismiss ground No. 1. 13. Coming to ground No.2, we uphold the finding of the first appellate ....
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....ransaction with an associated concern. This, in our considered opinion, cannot be approved by us. Though the issue is not in dispute, between the parties, then the same is patently illegal, the Tribunal cannot give its stamp of approval for the same. It is the duty of the Tribunal to ensure that the provisions of the Act and the Rules are followed and just because the Revenue as well as the assessee agreed not to follow the Act and the Rules and do not dispute the same before the Tribunal, it does not prevent the Tribunal from enforcing the law. In any event, in this case the learned DR has cited the decisions i.e. in the case of Tej Diam (supra) and Starline case (supra) wherein the Tribunal held as follows : "TNMM requires comparison of ....