9911796707
TMI Blog2012 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... urvive for adjudication. The lone surviving ground No.1 is reproduced herein below for consideration. "The learned CIT(A) has erred in law and on facts in deleting the disallowance of the sum of Rs.44,30,589/- claimed as deduction u/s 80 IB of the IT Act." 3. At the beginning of the hearing the learned AR submitted that the Tribunal had decided the same issue in assessee's own case viz. "the learned CIT(A) has erred in law and on facts in deleting the addition of Rs.25,13,417/- made on account of disallowance of claim of deduction u/s 80 IB of the Act" for AY 2006-07 in ITA No.2803/Ahd/2009 dated 18-05-2011 wherein the order of the learned CIT(A) was confirmed with the following observations by the Tribunal: "7. Thereafter, it was held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proportion to the turnover of both the units, cannot be approved when as per the chart given by the assessee regarding profit percentage of both these units for earlier four years shows that profit of unit III was always around 67% whereas the profit of unit IV is around 40% in assessment year 2004-05. When there is so much difference in the profit percentage of both the units as per separate accounts maintained by the assessee in which no specific defect has been pointed out by the A. O. , the entire profit of the assessee cannot be allocated to both these units in the ratio of turnover of these two units. Considering all these facts, we do not find any reason to interfere in the order of Ld. CIT(A) because his order is after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consequent productivity, which may be a very strong assumption. Not only the appellant has a strong case in arguing that the two units are separately registered under Excise authorities, but also the fact is what we have not been able to counteract his arguments that the two units are producing separate items and it has almost monopolistic control with respect to the items produced by Unit- IV. The Heat Exchangers is a vast category and obviously like any other product it has further sub categories and to assume that each product produced is similar and involved the same margins of profit may be over simplifying the situation. The appellant has audited books of accounts for both the units and no major defect, other than the items listed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bombay Project Officer but as well should have been charged to the Unit-IV. As is the normal practice, the appellant has reworked it by allocating the profit in the ratio of the turnover. In my view, this is a reasonable approach which does take care of the Assessing Officer's apprehension and can be stated to be due to scrutiny done by him. 2.4.2 Therefore, to sum up, while the Assessing Officer's action of allocating the profit in the ratio of sales turnover is not accepted, the reworking submitted by the appellant during the course of appellate proceedings is accepted. As per this working which is discussed in para 2.3.4 of the present year, the profit of Unit -IV comes to Rs.84,58,859/- and 30% of the same at Rs.25,35,658/- would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29/- for computing profits u/s. 80IB. Consequently, profits u/s. 80 IB has been claimed on a lower side. Although these facts were submitted during the assessment proceedings, however, it appears that these facts escaped attention of the A.O. These expenses have been worked out in the ratio of turnover of Unit -IV to the total turnover. In my considered view, the appellant has suomoto apportioned administrative expenses to Unit-IV and accordingly, further apportionment and disallowance of deduction u/s. 80IB is not required. 2.5 In view of above facts I do not agree with the method adopted by the Ld. A. O. for the computation of deduction u/s. 80 IB and disallowance of Rs.44,30,589/- is deleted. This ground of appeal is allowed." 7. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
