Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 1377 - ITAT AHMEDABADDeduction u/s.80IC on Baddi Unit - profit attributable to marketing division and brand value to be disallowed or not - Held that:- As decided in assessee's own case for A.Ys. 2007-08 & 2008-09 [2016 (7) TMI 383 - ITAT AHMEDABAD] CIT(A) while deciding the issue in favour of assessee has given a finding that there was no marketing division and, therefore, there was no transfer of goods from eligible to non-eligible undertaking and in the absence of marketing division being a separate undertaking, no profit could be attributed to the marketing activity. With respect to brand value, the ld.CIT(A) has given finding that the same is owned by the foreign collaborator and there cannot be any profit attributable to brand. He has further given a finding that AO had quantified the gross profit attributable to marketing and brand value and disallowance and that since deduction u/s.80IC is claimed in respect of net profit and, therefore, disallowing gross profit attributable to marketing and brand value is not correct and that further, since the marketing expenses debited to the Profit & Loss Account are more than gross profit computed by the AO, that there cannot be any disallowance of deduction u/s.80IC - Decided in favour of assessee Addition of excess interest expenses debited by assessee in accounts of Gujarat Unit - Held that:- Facts being similar, so following same reasoning, discussed therein that H.P. Unit had sufficient reserves and surplus to meet its liability. In fact, First Appellate Authority has not only confirmed this but has also observed that the H.P. Unit had advanced surplus money to the Gujarat Unit in A.Y. 2008-09. Facts being similar, so following same reasoning, we are not inclined to interfere in the finding of CIT(A) who has rightly deleted the addition made on account of excess interest expenses of ₹ 172.42 lacs debited by assessee in the accounts of Gujarat Unit. - Decided in favour of assessee Addition u/s.145A - Held that:- Regarding this provision in respect of A.Y. 1999-2000, being the first year after the insertion of section 145 A of the Act, there is difference of opinion as to whether only closing stock had to be adjusted or whether all the three elements namely, purchases, sale and inventory are to be adjusted to include the element of VAT. In respect of all the subsequent assessment years the ratio laid down is that all the three items namely, purchases, sale and the inventory (as mentioned in 145A of the Act) are to be adjusted to include element of VAT. Effectively, such an exercise is revenue – neutral. So, in this background, CIT(A) rightly deleted the addition in question. This reasoned factual finding of CIT(A) in above legal background needs no interference from our side. We uphold the same.- Decided in favour of assessee
|