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TMI Blog2012 (8) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative expenses to Unit-IV and accordingly, further apportionment and disallowance of deduction u/s. 80IB is not required - sustain the apportionment worked out by the assessee - against revenue. - ITA No.539/Ahd/2012 - - - Dated:- 15-6-2012 - SHRI G. C. GUPTA, AND SHRI A. MOHAN ALANKAMONY, JJ. Appellant by Shri Vinod Tanwani, Sr. DR Respondent by Shri P. M. Mehta, AR O R D E R PER A. MOHAN ALANKAMONY: The revenue has filed this appeal aggrieved by the order of the learned CIT(A) in appeal No. XI/373/10-11 dated 20-12-2011 for assessment year 2008-09 passed u/s 143(3) read with section 250 of the Act. 2. The revenue has raised three grounds in its appeal, however, grounds No.2 and 3 are general in nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reduced and as a result, the profit of Unit III gone up and profit of Unit IV went down. It is also noted by the Ld. CIT(A) in para 2.4.1 of his order that the expense which are allocated by the assessee to unit IV as per the revised working are either indirect and over head expense or the expenses relating to marketing, production and director s salary which has been charged either to unit III or Bombay Project office but the same is required to be charged proportionately to unit IV also. In the revised working only this adjustment was done by the assessee itself and, therefore, on this aspect, the order of Ld. CIT(A) is reasonable in the facts and circumstances of the present case. The action of the A. O. in working out profit of both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 2006-07. The disallowance of deduction u/s. 80 IB for the A. Y. 2006-07 has been considered by the Ld. CIT(A)-XI in appeal No.CIT(A)-GNR/177/2008-09 dated 31-7- 2009. The operational part of this order is reproduced as under for the sake of brevity. 2.4 The matter has been given due consideration. In my view the working out of eligible profits on the basis of the percentage sales turnover of Unit-IV would be inappropriate, notwithstanding that the A. O. had found certain papers which had overwriting and which did not have the exact address of the Unit-IV. Doing so would tantamount to taking the view that Unit- III and Unit IV are exactly on par in all respect, whether it is the output produced or the sales realization or the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more or less remains in the same region for the two units over the last 5 years. Therefore, I think the reasons and thereafter method adopted by the Assessing Officer to re-compute the profits are unfair in the facts of the case. 2.4.1 On the other hand, the queries raised by the Assessing Officer did result in appellant verifying its computation of profits as far as the indirect expenses and consequent allocation is concerned, the appellant has come up with a fair amount of reallocation at the appellate stage with respect to the indirect or overhead expenses and which have been discussed in para 2.3.3 and 2.3.4 earlier. These are the expenses related to the marketing of the product or director s salary etc. which had been charged either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducing different items and Unit-IV is producing items in which the appellant has got monopoly, accordingly, I hold that it will be unfair to compute profits of Unit-IV in the same proportion as that of overall business for the purpose of section 80IB. 2.4 However, it will be reasonable to allocate proportionate administrative expenses of Unit- III and Unit-IV for computing deduction u/s. 80 IB. It is seen that in the return of income, the appellant has apportioned following expenses to Unit-IV from Unit- III. SN Particulars Amount (Rs.) 1 Administrative and Selling expenses 10,39,142/- 2 Manufacturing expenses 9,84,587/- 3 Employees emoluments 11,70 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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