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TMI Blog2015 (11) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue back to the file of the Assessing Officer with a direction to examine the details furnished by the assessee with regard to all expenses including interest, finance charges, depreciation and other general administrative expenses on the basis of incremental inventory of work in progress from earlier assessment year to this assessment year, after giving due credit to the inflow of funds, if any in both units. The Assessing Officer shall independently examine the issue after proper enquiry. With these observations, we are remitting the issue back to the file of the Assessing Officer for fresh consideration. - Decided in favour of revenue for statistical purposes - I.T.A. No.2187/Mds/2014 & C.O.No.12/Mds/2015 - - - Dated:- 28-8-2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Varadaraja Textiles reported in 9 ITD 469 (Mad) been accepted by the Revenue) in support of the contention of the respondent , viz Section 253(2) of the Act provides that the Commissioner may, if he objects to any order passed by the Commissioner (Appeals) direct the ITO to file an appeal to the Tribunal against the order. But, this does not mean that every order of the Commissioner of Income Tax (Appeals) which interferes with the assessment made by the ITO can be objected to. The objection must be reasonable and rational cannot be made without regard to the correctness of the order appealed against. The power itself is a discretionary power and is coupled with the duty to act fairly. The exercise of this power is also a matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not rejected bythe appellant. (iii) Method of accounting was not rejected in terms of section 145 of the Act. (iv) That the appellant faield to appreciate that the project ws nearing completetion and hence no outflow of funds required. (v) That the respondent has reservoir of funds in its hand in the light of realiationof sale price and opening balance of reserves. (vi) The 80IB project was not mingled with regular projects in the light of separate infrastructure. 5. The order of the Commissioner of Income Tax (Appeals) has been based on analysis of above facts and thus requires no tinkering on facts. 4. There was a delay of 122 days in filing of Cross-objection. The assessee filed a condonation petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, so as to gain more deduction u/s 80IB and reduce the taxable profits from the non-80IB unit. Accordingly, the Assessing Officer reworked the profits of unit entitled for deduction u/s.80IB and non-80IB units on pro-rata basis with reference to increase in inventory ratio (80IB unit 63.5% and non 80IB unit -36.5%). After reallocating the expenditure between 80IB unit and non 80IB units, the Assessing Officer restricted the eligible deduction u/s.80IB (10) to G8,97,33,422/- against the claim of G10,59,37,589/- made by the assessee. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). 6. The Commissioner of Income Tax (Appeals) observed that the ld. Authorised Representative for assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits and claim more deduction benefits from the 80lB unit. The expenditure like construction expenses, sales and general expenses which were shown other way round were not touched, since they were convincing to the Assessing Officer This theory of the Assessing Officer cannot be accepted. It was beyond anybody's imaqination that the assessee will deliberately hike up the expenditure of non 80lB units under some heads and not others. If the AO is logical then, not being satisfied with the accounts, he should have rejected the books first and estimated the entire expenditure between the 80IB unit and non 80IB units on some scientific basis. Reallocating the expenditure on certain presumption and choosing only a few head where the expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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