TaxTMI 
TaxTMI 
2011 (8) TMI 945
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....assed u/s 114 on 28.07.2004. The details of income and adjusted book profit computed in this order have also not been furnished in the assessment order. The return was selected for scrutiny by issuing notice u/s 143(2) on 27.08.2004. The assessment was completed on 10.03.2005 at total income of Rs. 1,25,94,429/- and adjusted book profit of Rs. 5,52,25,496/-. The assessee-company is carrying on the business of manufacture and sale of Silica, which has applications in diverse fields. The order was subject matter of appeal before the CIT(A)-VI, New Delhi. He disposed off the appeal on 30.05.2007, and the appeal was partly allowed. Aggrieved by this order, both the assessee and the revenue are in appeal before us. We proceed with the appeal of the assessee at the first instance. 2.1 In the course of hearing before us, the learned counsel filed a chart in respect of issues involved in the appeals. In this chart, the position of various grounds taken in appeal of earlier years, except the issue of transfer pricing adjustment and depreciation of wiring etc., have been narrated. Therefore, we proceed to decide these grounds on the basis of remarks made in the chart. 3. Ground No.3 is....
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....t and dismissed accordingly. 4.1 Ground No. 4(b) is against the failure of the learned CIT(A) to give directions for excluding a sum of Rs. 12,03,463/- from the total income, representing the provision written back to the profit and loss account. In this connection, it is mentioned in the chart that the assessee had requested the Assessing Officer to allow deduction of this amount as the allowability of provisions made in earlier years had been disputed by the revenue. However, the Tribunal and the High Court have allowed deduction on due basis and, therefore, this claim is no longer tenable in law. Accordingly, this ground is also dismissed. 5. Ground No.5 is against the finding that electrical wiring etc. were not "machinery or plant" but were a part of the factory or other buildings for the purpose of deciding the rate of depreciation thereon. The submissions of the assessee before the learned CIT(A) had been that the old Appendix-1 of depreciation rates included wiring and fittings of electric lights and fans under the head "electric machinery". However, in the current appendix, there is no separate item. The reason is that the list has been shortened and general rate for....
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....uilding as per aforesaid definition. In the earlier Appendix 1, there was specific mention of "wiring" under the head "plant". Accordingly, it is agitated that depreciation @25% may be directed to be allowed. 5.2 In reply, the learned DR relied on the orders of authorities below. 5.3 We have considered the facts of the case and submissions made before us. There is an apparent contradiction in the findings of the Assessing Officer vis-a-vis the submissions made by the learned counsel. From the order of the Assessing Officer, it becomes clear that his finding is that wiring etc., on which higher depreciation is claimed, are old assets. However, the submissions of the learned counsel tend to show that these assets were installed alongwith machinery or plant in this year. Appendix 1, as applicable to this year, provides for general rate of depreciation at 25% in respect of machinery and plant. This appendix is applicable for assessment years 1998-99 to 2002-03. The earlier Appendix 1, applicable for assessment years 1984-85 to 1987-88 provided for the general rate at 15%. We do not find any mention of wiring in this appendix under the head "machinery and plant". Nonetheless the f....
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....) has granted part relief, they are taken up together. 8.1 The Assessing Officer had made a reference to the transfer pricing officer ("TPO" for short) to determine arm's length price of international transactions entered into by the assessee with the associated enterprises ("AE" for short). The TPO has listed such transactions with three AEs, being Degussa AG, Germany, JJ Degussa Chemical, Indonesia, and JJ Degussa Chemicals, Philippines. The assessee manufactures Silica and exports it to various parties in various countries. The assessee chose comparable uncontrolled price ("CUP" for short) method to justify the value of international transactions with the AEs. Since the assessee had exported goods to unrelated parties, the price charged from them was applied for justifying the valuation with AEs. The major points raised by the assessee are that the average price charged from the AEs is within 5% variation limit, which is permissible 92C(2). No commission has been paid in relation to the transactions with the AEs while commission of 2.5% to 5% has been paid in relation to the transactions with uncontrolled parties. The TPO did not accept the first submission but accepted the s....
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....as been used by the assessee as well as the TPO. In its study report, the assessee had aggregate sales quantity-wise and region-wise. However, the Assessing Officer consolidated the products sold to the AEs and compared the price charged with the price charged in uncontrolled transactions. The assessee had taken yearly average price while the TPO has taken monthly average price for applying CUP method. The assessee had valued transactions on CIF basis except the transactions in the neighbouring jurisdictions such as Sri Lanka, Bangladesh etc. As against the aforesaid, the Assessing Officer used FOB value for the purpose of comparison. Then there is also the question of the date of fixation of price, i.e., as to whether it should be taken as on the date of receipt of the order or on the execution of the order. It is explained that the assessee had excess capacity and it was not able to sell the goods on a competitive basis in its own name. The Degussa, AG, Germany is a well known name in this line of business. Therefore, goods were sold to South American Countries through the Degussa, AG, Germany, as this AE's name was widely accepted in those jurisdictions. That is the reason that ....