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TMI Blog2012 (10) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that he had computed profits of the undertaking and has also filed certificate of the auditor in respect of the eligible undertaking and has maintained proper Books of A/c as required to compute profits - set aside this issue to the file of the Assessing Officer for reconsidering the profitability of the eligible undertaking on the basis of the workings furnished by the assessee, after giving reasonable opportunity to the assessee to put forward its case - appeal of the assessee is treated as allowed for statistical purposes. - ITA Nos. 60,61, 87 & 88/Hyd/10 - - - Dated:- 9-7-2012 - Chandra Poojari And Asha Vijayaraghavan , JJ. Revenue by: M.S. Rao Assessee by: P. Murali Mohana Rao ORDER Per Asha Vijayaraghavan , J.M.: These appeals filed by the revenue as well as assessee are directed against the respective orders of the CIT(A)-I, Hyderabad for the assessment years 2003-04, 2004-05 2006-07. Since identical issues are involved in these appeals, they were heard together and, therefore, a common order is passed for the sake of convenience. ITA NOS. 60 61/Hyd/10 for AY 2004-05 2006-07 appeals by the revenue 2. In both these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an indivisible business, the expenditure incurred by the assessee for the purpose of the indivisible business cannot artificially be broken up to identify and disallow expenditure which is supposed to have been incurred for the purpose of earning the exempt income. However, while applying the section there is no authority conferred by the section upon the Assessing Officer to deem or assume certain expenditure to have been incurred in relation to the tax-free income. Common expenditure incurred at the head office cannot be broken up artificially to attribute or apportion a part thereof to the earning of the tax-free income on the assumption that such part of the common expenditure was incurred in relation to the tax-free income. Not only the incurring the expenditure but also its relation to the exempted income must be clear and must be capable of being ascertained on the face of it without invoking any further mental exercise. The burden is on the Assessing Officer not only to show that some expenditure was factually incurred but also to show its relationship with the income exempt from tax. The section only permits the Assessing Officer, in an indivisible business consisti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer at ₹ 2,26,42,699/- and income from LTCG at ₹ 11,08,50,307/-. The Assessing Officer in the course of the present assessment proceedings considered the detail filed by the assessee and adopted the total income as determined earlier u/s 143(3) rws 250 of the Act at ₹ 8,82,07,608/-. Aggrieved, the assessee carried the matter in appeal before the CIT(A). 9. Before the CIT(A), the assessee stated that the Assessing Officer had not allowed short term capital loss of ₹ 6,15,06,000/- on sale of shares to be set off against the long term capital gain before arriving at the net taxable capital gain, which should have been considered. The setoff is allowable u/s 70 of the Act. After considering the submissions of the assessee, the CIT(A) held as under:- 4. I have gone through the fact of the case and the submission of the appellant. I find that in the assessment which is under this appeal, the Assessing Officer has not made any fresh addition any disallowances and had adopted the total income determined earlier u/s 143(3) rws 250 of the IT Act. This fact was also pointed out to the AR of the appellant during the course of the appellate hearing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. ITA NO. 88/HYD/10 appeal by the assessee for AY 2004-05. 13. In this appeal the assessee has raised two grounds of appeal pertaining to disallowance of legal and professional fees. 14. In the assessment order, the Assessing Officer observed that vide letter dated 22/12/2006, the assessee was asked to furnish the details in support of its claim of deduction u/s 80IA. In reply, the assessee vide letter dated 28/12/2006 submitted certain information and audit report in Form No. 10CCB along with P L account and the balance sheet pertaining to eligible business claiming deduction u/s 80IA. After verifying the P L A/c and balance sheet the Assessing Officer observed that these statements were prepared in a cooked manner for the purpose of claiming the exemption. For instance, in the case of balance sheet on the liability side, an account styled as due to head office ₹ 7,46,46,345/- was shown. Similarly, on the assets side, no details like cash on hand, cash at bank, current assets etc. were given. Even the break up of fixed assets was also missing. From this, the Assessing Officer concluded that the assessee has not maintained proper accounts in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h permission/agreement etc. was filed for the alleged wind mill project of the appellant. Thus considering the fact and circumstances for the case I am of the view that the appellant has not satisfied the condition laid down in sec. 80IA(7) so as to entitle it for the deduction claimed. In view thereof, the rejection of the claim by the Assessing Officer is justified and hence sustained. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 16. The learned counsel for the assessee before us submitted that for obtaining deduction u/s 80IA, separate P L books have to be maintained and P L computed. The learned counsel for the assessee relied upon the decision of the Hon ble Calcutta High Court in the case of CIT Vs. Harinkhola Ice Vs. Cold Storage Ltd., 134 ITR 540 (Cal) wherein it was held that it is not necessary for maintaining separate books for the eligible undertaking if the profits of the undertaking can be computed from the books maintained by the assessee. 17. The learned DR, on the other hand, relied upon the orders of the authorities below. 18. We have heard the arguments of both the parties, perused the record and gone through th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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