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TMI Blog2014 (1) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... ss objection which is arising out of the aforesaid appeal of the Revenue. The grounds raised by the Revenue, read as under:- "1. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in allowing deduction of Rs. 11,30,756/- claimed by the assessee under section 801B of the Income tax Act 1961 for its Unit No.ll without appreciating the fact that the assessee Unit No II is only an extension of Unit No. I and therefore Unit II is not entitled for 100% deduction under section 801B of the Income tax Act 1961. 2. On the facts and in the circumstances of the case, and in law, the Ld. CIT (A) erred in allowing deduction of Rs. 11,30,756/- claimed by the assessee under section 801B of the Income tax Act 1961 for its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% of the profit made in respect of Unit-II which has commenced business in the assessment year 2003-04. He observed that in the assessment order for the assessment years 2003-04 and 2006-07, it has been held that Unit-II is not a new Unit but it is an extension of Unit-I and following the same reasoning he disallowed the claim for deduction under section 80IB. 5. Before the learned Commissioner (Appeals), it was submitted that the Tribunal in assessee's own case in ITA no.5928 and 6826/Mum./2006, order dated 25th February 2010, has held that Unit- II is a separate industrial undertaking. The learned Commissioner (Appeals), relying upon the decision of the Tribunal, allowed the deduction after observing and holding as under:- "3.5 I ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for both the units. Common production re9ister on which the AO. has placed strong reliance was maintained by the Production Manager only for his record as was stated so during the course of survey itself. The said statement was not found to be incorrect. We find from the statement recorded at the time of survey that the items produced in Unit-I was mainly taxing which was not very costlier while Unit-II produced mainly Vitamins which were costlier. Even tile raw material used for both the units is different as was stated in reply to question no. 19 which has been reproduced at page 15 at the impugned order. There is no reference in the assessment order to any contrary material found at the Time of survey. On the question of discrepancy fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee types of expenses on the basis of turnover of both the units. In our considered opinion, the selling expenses have direct relation with the turnover. We, therefore, hold that the apportionment of selling expenses on the basis of the amount of turnover in both the units is appropriate. The financial expenses represent the cost of money borrowed for use in business. Raw material for a product in Unit-I may cost Rs. 100 while in the other unit may cost Rs. 1,000. Bifurcation of the expenses 0'1 the basis of quantity produced would obviously lead to absurd situation because the number of units manufactured with different values cannot be the basis of apportioning the expenses. In our considered opinion the apportionment of financial expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the learned Commissioner (Appeals) as above, therefore, respectfully following the same, we uphold the findings of the learned Commissioner (Appeals) and dismiss the grounds raised by the Revenue. 7. In the result, Revenue's appeal is treated as dismissed. We now take up cross objection preferred by the assessee. 8. In the cross objection, main issues raised by the assessee are that firstly, the interest receipts of Rs. 2,08,960, should be assessed under the head "Business Income" and not under the head "Income From Other Sources" and secondly, the set-off of interest payment against interest receipts should be given and only net should receipt should be considered. In this regard, reliance has been placed on the decision of ACG Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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