Case Law Details
DCIT Vs Goodcare Pharma Pvt. Limited. (ITAT Kolkata)
Deduction claimed by the assessee under section 80IC in respect of profit derived from the eligible Dehradun Unit was restricted by the Assessing Officer on the ground that the profit of the said Unit as declared by the assessee was allegedly higher. It was pointed out that the profitability of Dehradun Unit was always higher and it was accepted by the Assessing Officer in the earlier years. Entire sales of Dehradun Unit was made by the assessee-company to its associate concern M/s. Shree Baidyanath Ayurved Bhawan Pvt. Limited and the transactions involving the said sales were the subject matter of Transfer Pricing exercise for A.Y. 2013-14. It was submitted that the Transfer Pricing Officer after making the Transfer Pricing analysis based on comparable cases found the sale price charged by the assessee to M/s. Shree Baidyanath Ayurved Bhawan Pvt. Limited as at Arm’s Length. The reasons for the higher profit margin earned by the Dehradun Unit were also explained by the assessee by showing as to how the cost of production of the same Unit was lower due to various incentives and the availability of raw material at cheaper rates in the local market. Keeping in view all these relevant aspects, we are of the view that there was no justifiable reasons for the Assessing Officer to doubt or dispute the higher rate of profit declared by the assessee-company in its Dehradun Unit and to estimate the same at a lower rate thereby restricting the claim of the assessee for deduction under section 80IC.
FULL TEXT OF THE ITAT JUDGMENT
These two appeals are preferred by the Revenue against the common order passed by the ld. Commissioner of Income Tax (Appeals)-4, Kolkata dated 27.09.2017 for A.Ys. 2012-13 and 2013-14 and since some of the issues raised therein are common, the same have been heard together and are being disposed of by a single consolidated order.
2. First we take up the appeal of the Revenue for A.Y. 2012-13 being ITA No. 2485/KOL/2017. The relevant facts of the case giving rise to this appeal are as follows:-
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