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TMI Blog2012 (5) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... g the addition of ₹ 25,13,417/- made on account of disallowance of claim of deduction u/s.80IB of the IT Act. 2. On the facts and in the circumstances of the case. The Ld. Commissioner of Income-tax (A), Gandhinagar ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Id. Commissioner of Income-tax, Gandhinagar may be set aside and that of the Assessing .Officer be restored. 2. In the cross objection filed by the assessee, the grounds raised by the assessee are that Ld. CIT(A) has erred in not allowing entire deduction of ₹ 29,85,313/- claimed by the assessee u/s 80-IB and restricting the same to ₹ 25,36,658/-. 3. Brief facts till the assessment sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of deduction u/s.80IB. The method adopted by-the Assessing Officer was to compute the profit in the ratio of sales' turnover of Unit-IV to the total sales turnover of the company. Consequently, the said eligible profit was worked out at ₹ 18,91,873/-. Further, the non-eligible profits pertained to other income was worked out at ₹ 3,18,884/- and thereby the resultant amount of deduction available U/S.801B was worked out at ₹ 4,71,896/-. 4. Being aggrieved, the assessee carried the mater in appeal before Ld. CIT(A) who has held that the assessee is eligible for deduction u/s 80-IB to the extent of ₹ 25,35,658/-. He directed the A.O. accordingly. Now, the revenue is in appeal for the relief allowed by CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs after considering the depreciation as per the IT. Act. The computation provided by-him is as follows: Sr: No Particulars Unit-HI Less 11.25% * Unit-IV Net Unit-HI Unit-IV (A) 1. INCOME Sales 217,389,870 217,389,870 27,529,01 2 Increase Decrease Stock 10,709,117 10,769,117 5,485,820 3 Other income 11,066,763 11,066,763 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,795,572 866,871 9. Administrative Selling Exp. 6,879,897 773,988 6,105,909 TOTAL EXPENDITURE 210,172,608 1,492,184 208,680,424 13,476,878 (Q Profit Before Taxes (A-B) 7,574,908 1,492,184 9,067,092 8,695,903 11.25 is turnover of Unit-IV of the total turnover of Units III + IV. 2.3.4 Based on the deduction u/s 80IB was worked as follows: Profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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 the units in proportion to the turnover of both the units, cannot be approved when as per the chart given by the assessee regarding profit percentage of both these units for earlier four years shows that profit of unit III was always around 67% whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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