The Commissioner Of Income-Tax (Central) Ludhiana v. M/S Punjab Concast Steels Ltd., Ludhiana

ITR No. 410 of 1995 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 410 of 1995Date of Decision: 2.7.2010 The Commissioner of Income-tax (Central) Ludhiana Versus M/s Punjab Concast Steels Ltd., Ludhiana ....Petitioner. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. D.K. Mehta, Advocate for the revenue. None for the assessee. ADARSH KUMAR GOEL, J. 1.The Income Tax Appellate Tribunal, Chandigarh Bench (inshort “the Tribunal”) has referred the following question of law on adirection issued by this Court in ITC No. 146 of 1994 vide order dated12.5.1995 for opinion of this Court under Section 256 (1) of the IncomeTax Act, 1961 (hereinafter referred to as “the Act”) for the assessmentyear 1989-90:- “Whether, on the facts and in the circumstances ofthe case, the ITAT is justified in law in holding thatthe provisions of section 80-I (8) are not applicable inthis case?” 2. The assessee is a public limited company engaged in the business of manufacture and sale of iron and steel products andclaimed deduction under Section 80-I of the Act. The Assessing Officerheld that Section 80-I (8) of the Act will apply and value of transfer ofgoods inter se different units taken by the assessee will not be taken tobe as declared by the assessee but average price of the month in whichtransferred took place. Accordingly, the profit was taken at higher figureand addition was made to the declared income. On appeal, theCommissioner of Income Tax (Appeals) held that the provisions ofSection 80-I (8) of the Act could not be invoked as the sale pricedeclared by the assessee was as per market value. The Tribunalupheld the said finding in the following terms:- “In the present case, the Assessing Officer hasclearly mentioned in the body of the assessmentorder that the cost of the raw material andconsumable stores purchased by SMS-I wastransferred and debited to profits and loss account ofvarious units. As regards the sale value, theAssessing Officer has clearly mentioned that theunits had realised maximum realisable price from thehead office. Both these findings are findings of fact.Against the background, it cannot now be said thatthe goods were transferred from various units to theindustrial undertaking and vice versa at less than themarket price. In fact, the onus is on the Revenue torecord a finding and to prove that the transfer ofgoods is at less than the market price. Instead of recording that finding, the Assessing Officer gives acertificate that the goods in the instant case had beentransferred at the “maximum realisable price”. In thatview of the matter, it is clear that the provisions ofsection 80-I (8) are not applicable in the instant caseand hence the proviso to section 80-I (8) can also notbe invoked. It is significant to note that the learnedCIT (A) has also held though impliedly that theprovisions of section 80-I (8) are not applicable to thefacts of the instant case. That finding has also notbeen challenged by the Revenue. We, therefore,hold that the entire exercise of re-allocation ofvarious expenses on the facts and in thecircumstances of the case was unwarranted.” 3.No question has been claimed on the correctness of thefinding that transfer inter-se different units was on the market price. Onthis finding Section 80-I (8) cannot apply. No exception can thus, betaken to the view taken by the Tribunal. Accordingly, the question hasto be answered against the revenue. Ordered accordingly. (ADARSH KUMAR GOEL) JUDGE July 2, 2010gbs (AJAY KUMAR MITTAL)JUDGE