TaxTMI 
TaxTMI 
2021 (8) TMI 290
X X X X Extracts X X X X
X X X X Extracts X X X X
....:- "1. Whether on the facts and circumstances of case and in and in law, the Ld CIT(A) is justified in deleting the addition made by the AO by treating business income of Rs. 14,90,99,385/- as income from other sources and restricting claim of deduction u/s 10AA of the IT Act, without appreciating the facts that the Assessing Officer has made right comparison with Fargo Mantle Products Private Limited which is engaged in the similar type of business? 2. Whether on the facts and circumstances of case and in and in law, the Ld CIT(A) was justified in deleting the disallowance made by the Assessing Officer by invoking provisions of Section 80(IA)(10) r.w.s. 10AA(9) in giving deductions of interest on Capital of the assessee firm after find....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee to furnish details of comparable instances of companies engaged in manufacturing of similar product. The assessee field its reply, in reply the assessee contended that there is no comparable company which is manufacturing the hard incandescent mantles. The assessee-company developed the capacity to manufacturing hard mantles only because of acquisition of running plant from Malta. There is very few manufacturer of hard mantles across the globe. Hard mantles and soft incandescent mantles are widely used around the world for street lighting and camping purposes. The assessee is export in mantles to Europe and Germany. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer took a comparable case of Fargo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ms. Urvashi Shodhan, Advocate for the assessee and Sh. O. P Vaishnav Learned Commissioner of income tax- departmental representative (CIT-DR) for the revenue. The Ground No.1 relates to deleting the addition /disallowance deduction under section 10AA of the Act. The ld. CIT-DR for the Revenue supported the order of Assessing Officer. The Ld. CIT-DR submits that ld. CIT(A) failed to appreciate a finding of Assessing Officer is that assessee has shown abnormal profit for the year under consideration and profit of assessee was less by 13% in subsequent year. The ld. CIT(A) further failed to appreciate that there is minor difference in the product of assessee and FMPPL. The minor difference would not lead to so much of difference. The Assessin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....td. that assessee acquired running manufacturing plant with all premium segments customer and it was having monopoly in business. The assessee has been earning good margin profit. The ld. Senior counsel for the assessee further invited our attention on pages 8-9 of the order of Ld. CIT(A) and pointed out that the assessee is shown GP @ 84.29% from assessment year 2009-10, GP at 79.39% in assessment year 2010-11, 82.69% in assessment year 2011-12, 84.84% in assessment year 2012-13, 84.01% in current year, 71.11% in subsequent year i.e. 2014- 15 and again 84.81% in assessment year 2015-16. 6. The ld. Senior Counsel for the assessee submits that case of assessee was selected for scrutiny in assessment years 2009-10 to 2012-13. In all years, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0IA(10). The Assessing Officer thereby disallowed Rs. 14.90 crores and treated the same income for 'other sources'. Before us the ld. Sr. counsel of the assessee vehemently argued that from assessment year 2009-10 onwards till assessment year 2015-16 the assessee has shown consisted profit except little reduce in assessment year 2014-15. We find merit in the submission of ld. Senior counsel of the assessee that the assessee has shown substantial profit in all years and the revenue has not doubted such profit except in the year under consideration. We further find merit in the submission of ld. Senior counsel of the assessee that similar profit almost consisted for about 80% had been accepted for assessment years 2009-10 to 2012-13 in the or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal No.265 of 2017 dated 02.05.2017 and CIT vs. MacDowell and Commission. Ltd. Tax Appeal No. 615 and 617 of 2006 dated 11.10.2006. The ld. Sr. counsel of assessee submits that Ld. CIT(A) while granting relief to assessee has followed the decision of jurisdictional high court, which are squarely applicable in the facts of the present case. Therefore, we do not find no fault in order of Ld. CIT(A). 11. We have considered the rival submission of both the parties and perused materials carefully. During the assessment, the Assessing Officer noted that the assessee has not claimed interest on capital contribution and remuneration to the partners. The assessee derived income from manufacturing unit and claimed deduction under section 10AA of t....