September 2023
Section 10B(7) r.w.s. 80IA(10) — The onus is on the department to prove that there existed an arrangement between the assessee and its associate enterprises to earn more than the ordinary profit and if that is not established then there cannot be any addition and corresponding disallowance under the said provisions.
28. DCIT vs. Halliburton Technology Industries (P) Ltd
[2022] 99 ITR(T) 699 (Pune – Trib.)
ITA No.:277(PUNE) OF 2021
A.Y.: 2011–12
Date: 10th June, 2022
Section 10B(7) r.w.s. 80IA(10) — The onus is on the department to prove that there existed an arrangement between the assessee and its associate enterprises to earn more than the ordinary profit and if that is not established then there cannot be any addition and corresponding disallowance under the said provisions.
FACTS
The assessee company was engaged in the export of IT enabled services [ITES] and was registered as a 100 per cent export-oriented undertaking with the SEEPZ special economic zone. The assessee company had filed its return of income for the relevant A.Y. 2011–12 on 30th November, 2011, and declared total income as NIL under normal provisions after claiming deduction under section 10B of the Act and a book profit of Rs. 9,60,43,389 under section 115JB of the Act. The case was selected for the scrutiny proceedings and the Ld AO observed that the assessee company had earned more than ordinary profits as the operating margin of the assessee company was 22.38 per cent and the operating margins of the comparable was 13.08 per cent. For this sole reason, the Ld AO was of the view that there was an arrangement between the assessee company and its associate enterprises that
