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TMI Blog2016 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ake the appeal in ITA No. 2468/Mum/2010. 3. The issue raised in the ground No.2 of the appeal by the Revenue is against the holding by the ld.CIT(A) that the assessee was entitled to deduction of Rs. 19,66,56,000/- under section 80IB of the Income Tax Act, 19621 (hereinafter referred to as the Act) in relation to its Silvassa Unit, by ignoring the admission by the assessee vide letter dated 24.12.2008 qua certain expenses were not properly allocated . 4. Facts in brief are that the assessee is engaged in the business of Manufacturing of welding consumables, equipment and project engineering products. The assessee was an associate concern of J B Advani group with the share holding of 49.84% held by M/s J B Advani and Co.Pvt.Ltd Company. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings, the assessee vide letter dated 24.12.2008 admitted the lapses on non-allocation of certain expenses to Silvassa unit and claim of deduction u/s 80IB was reduced to 1931.56 lakhs as against the claim as claimed earlier Rs. 1966.56 lakhs and thus thereby reducing the claim of Rs. 35 lakhs. The AO also worked out some variation under various head as regard allocation of expenses such as depreciation and financial charges which was calculated at Rs. 15 lakhs, and clubbed with the amount as offered by the assessee vide letter dated 24.12.2008 and thus, total deduction u/s 80IB worked out to Rs. 15 lakhs accordingly, the deduction 80IB was reduced to Rs. 1916.56 lakhs. The AO finally passed the order under section 143(3) of the Act vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.A. in Form No. 10CCB. He has also filed a letter justifying the allocation of expenses to Silvassa Unit which refers to financial charges in respect of export bill discounting and interest thereon. The company is a debt free company and did not utilize borrowed funds. 10. The A.R. further submitted that out or total export for which the financial charges and interest is attributable, the assessee company during the previous year has given the following details: total exports for the A.Y. 2006-07 Rs.39,77,32,009/- Equipment exports (manufactured in Pune plant) Rs.13,33,32,415/- Total consumable exports Rs.26,43,99,594/- Export E:ales from Silvassa plant Rs.19,36,000/- % of exports from Silvassa plant is 0.48% Total f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the appeal proceedings before the FAA, the assessee explained that there is no discrepancies in the allocation of expenses as he same were booked on actual basis in Silvsssa Unit and therefore the admission as made by the assessee vide letter dated 24.12.2008 was wrong and without any basis. The ld. AR submitted before us that the discrepancy in depreciation in financial charges Rs. 15.78 lakhs was also explained before the ld. CIT(A) and therefore heavily relied on the order passed by the ld. CIT(A). Per contra, the ld. DR brought to our notice that there were discrepancies in the allocation of expenses as represented by the AO in the assessment proceedings and relied on the order of AO by making submission that order of ld.CIT(A) be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 8D(2)(ii) and Rs. 10,71,460/- under rule 8D(2)(iii). During the appellate proceedings before the FAA it was submitted that the provisions of section14A r.w.r 8D were not applicable to the assessment year 2006-07 which is the year under consideration and were applicable from the assessment year 2008-09. The ld. counsel also submitted before the ld. CIT(A) that the assessee has made investments which were inclusive of investment in bonds, the income from which is liable to be taxed and was not exempt. After considering the submissions of the ld.AR, the FAA partly allowed the appeal of the assessee by observing as under : "5. I have duly considered the submission of the A.R. and I find that the assessee was having interest income from bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance u/s 14A. We find no merit in the argument of the ld.DR that the CIT(A) was wrong in holding that the investments in bonds be excluded for the purpose of disallowance under section14A r.w.r 8D. We do not find any infirmity in the order of ld.CIT(A) who has recorded the finding of fact that the income from bonds was taxable and was not exempt as noted by the AO and do not require any interference . We, therefore uphold the order of ld. CIT (A) and dismiss the appeal of the revenue on this issue. Resultantly, the appeal of the revenue stands dismissed on this ground also. 9. Now we shall take up the appeal in ITA 6479/Mum/2010 10. We have already decided an identical issue in ITA No. 2468/Mum/2010 (AY-2006-07) and therefore, our decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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