Case Law Details
Hindustan Unilever Limited Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that the amount of internal transfer between two EOUs of the assessee is to be considered for the purpose of arriving at the profit eligible for exemption under section 10B of the Income Tax Act.
Facts- The assessee is a company engaged in the manufacture, trading and marketing (including export) of fast moving consumer goods (FMC goods). For the year under consideration, the assessee filed a return of income on 31/10/2001 declaring a total income of Rs.830,19,95,740/-. The case was selected for scrutiny and statutory notices were duly served on the assessee.
The Assessing Officer completed the assessment assessing the income at Rs.948,46,19,890/- after making various disallowances / additions. Aggrieved, the assessee filed further appeal before the CIT(A) in which the CIT(A) gave partial relief. Against the order of the CIT(A) both the assessee and the Revenue are in appeal before the Tribunal
Conclusion- Held that the amount of internal transfer between two EOUs of the assesse is to be considered for the purpose of arriving at the profit eligible for exemption under section 10B of the Act. It is also to be noted here that since the impugned amount is an internal transfer which is shown as sales in one EOU and as expenditure in the other EOU, there is merit in the contention that at entity level it is tax neutral. In view of the above discussion, we delete the addition made by the Assessing Officer denying the amount of internal transfer as claimed under 10B of the Act.
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