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TMI Blog2018 (3) TMI 1738X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT DELHI] the assessee has produced all the books of accounts and vouchers before the AO during the assessment proceedings. No show cause query was issued by the AO on this account during the assessment proceedings. AO has not considered the fact that the units in exempted zones are mainly engaged in manufacturing on job work basis where there is either negligible or no input cost of raw material involved. It was noted that if the sales were made using their own raw material, there would be substantial difference in the GP rate insofar as, if the cost of raw material was excluded, the GP rate in all the units would remain the same. The fact that the exempted unit at Haridwar has shown a loss has not been referred to by the AO. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Haridwar and Units at Barotiwala, Pantnagar, Nalagarh and Haridwar are located in exempted zones. Bulk of purchases are made at Head office at Rohtak and after doing certain operations, the semi-finished items are sent to other units for further operations as all the operations are not practicable in any of the unit as different types of machines are installed in different units. A detailed note on the activities/operations undertaken at different units are placed in the paper book. Separate books of account are maintained in all the units which are also audited as per law. The A.O. calculated the income of exempted unit by calculating total turnover of all the units of assessee-firm and total profit declared by all the units and reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the AO has reduced the deduction admissible u/s. 80 IC of the IT Act by ₹ 10,04,37,557/- on the ground that out of the 3 exempted and 3 non-exempted units owned by the assessee in different states the maximum N.P. rate for a taxable unit was 6.90% while that for an exempted unit the minimum NP rate was 13.4%. We further find that the AO held that all units derive income from the same business activity and therefore, the gap between the profits of the taxable units and non exempted units appears to be unrealistic. Reference has also been made to transactions made in respect of purchases and job work expenses made with related concerns or units of the assessee's firms. Taking all these factors into account the AO has stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2009-10, the Tribunal also upheld the deletion of addition by holding as under, (as mentioned at page no. 4 of the impugned order passed by the Ld. CIT(A)). The Ld. Commissioner of Income Tax (A), it is seen, Ld. CIT(A) has followed the principle of consistency in deleting the addition made by the AO. No changes in facts from the earlier years have been brought on record. Moreover, the ld. CIT(A) has followed the decision of Delhi Tribunal, Third Member, Delhi in the case of DCIT vs. Delhi Press Samachar Patra 103 TTJ (Del) 45 wherein it was held that apportionment of expenses between different units without any investigation and collection any material is arbitrary. 7.2 We further note that ITAT, Delhi F Bench i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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