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TMI Blog2015 (10) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... n record for both the units which indicate the quantitative of raw material consumed and production as per excise law. He therefore held that A.O was not justified in re-allocating the expenses in proportion to the sale in both the units. However, with respect to certain other expenses, he has noted that the procedure followed by Assessee for allocating the expenses were not logical and without any documentary evidence and with respect to those expenses he had directed to the A.O to apportion the expenses in the ratio of turnover. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A) We further find that while dismissing the appeal of Revenue for A.Y. 2007-08 in Assessee’s own case wherein CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is now in appeal before us and has raised the following grounds:- 1. The Ld. Commissioner of Income tax (A) has erred in law and on facts in directing the Assessing Officer to delete the addition of ₹ 1,31,16,642/- made on account of reallocation of expenses relating to raw materials, manufacturing expenses, administrative expenses, selling expenses and financial expenses amongst Unit-I Unit-II in proportion to the sales in these units. 2. The Ld. Commissioner of Income tax (A) has erred in law and on facts in directing the Assessing Officer to apportion only the expenses relating to Consultancy Charges, Income Tax Appeal fee, Membership Fee Professional Tax in the ratio of the turnover of both the units. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reased in Unit-I but decreased in Unit-II though the process of manufacturing according to him was almost similar in both the units. He therefore concluded that there was no apparent reason for a decline in gross profit ratio in Unit-I and steep rise in gross profit ratio of Unit-II. He was of the view that Assessee has increased the exempt profit in Unit-II by debiting excessively expenses in Unit-I to trim down the taxable profits. He accordingly re-allocated the expenses in proportion of turnover and reworked the net profits from Unit-I and Unit-II. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who after considering the submissions of the Assessee granted partial relief by holding as under:- 2.3 I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. During the course of appellate proceedings, the appellant has also given a chart reflecting all the items in the P L Account and the amount of expenditure incurred in both the units indicating the basis on which the expenditure has been debited to EOU or Unit - I. The chart has been reproduced in the preceding pages. An examination of the chart show that most of the expenses have been booked by keeping separate set of accounts for both the units. It is also noted that the appellant has kept separate production record for both the units which indicates the quantity of the raw material consumed and production as per the Excise Law. It is also noted that raw material purchases for both the units are made separately. Other items of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is now in appeal before us. 8. Before us, ld. D.R. pointed to the various findings of A.O and supported his order. Ld. A.R. on the other hand reiterated the submissions made before A.O and ld. CIT(A) and further submitted that on identical facts in Assessee s own case for A.Y. 2007-08, the appeal of Revenue was dismissed. She placed on record the copy of the aforesaid order. She thus supported the order of ld. CIT(A). 9. We have heard the rival submissions and perused the material on record. We find that ld. CIT(A) while granting partial relief has noted that similar addition made by the A.O in the preceding year was not approved by his predecessor in 2007-08 and further A.O has not pointed out any specific defect in the books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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