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TMI Blog2021 (7) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... a more acceptable method for determining the profits from eligible business would be allocation of interest expenditure on the basis of turnover of the eligible and ineligible business segments. AO is directed to recompute the profit of eligible business deduction by allocating interest expenditure on the basis of turnover and not on the basis of balance of outstanding housing loan and loan against property recoverable at the end of the year as apportioned by the appellant company. Deduction u/s. 36(1)(viii) i.e. 20% shall be allowed on such profits and gains of the eligible business arrived after apportionment of the interest expenditure on the basis of turnover ratio of the two segments. Addition on account of cessation of trade li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability as the validity of cheques had expired and the creditors in respect of the said payments had foregone their liability. 3. In ITA No. 7679/Del/2017, following grounds have been raised by the revenue: 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in directing the AO to re-compute the profit of eligible business deduction by allocating interest expenditure on the basis of turnover of business segments without establishing the nexus of interest expenses with the business carried on each segment. ITA 6433/Del/2017: A.Y. 2013-14: 4. Brief facts of the care are that the AO disallowed interest amount of ₹ 2,27,56,710/- u/s. 36(1)(viii) on the grounds that the allocation of the assessee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar. It is stated that the company maintains separate accounts of income from housing loans and loan against property. The Ld. AR has further stated that ledger accounts were filed before the AO during assessment and it was submitted that the company apportions common expenses such as salary, depreciation, rent, advertisements, printing stationary, travelling and conveyance, communication expenses, repair maintenance, auditor's fee and electricity expenses based on the turnover ratio of the two business segments. Further, expenses viz. Provision for housing loan and non housing loan, contingent provision for standard assets which were directly identifiable, related to either of the two business segments are reduced from the income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the year as apportioned by the appellant company. The deduction u/s. 36(1)(viii) i.e. 20% shall be allowed on such profits and gains of the eligible business arrived after apportionment of the interest expenditure on the basis of turnover ratio of the two segments. This ground of appeal is disposed off accordingly. 6. We have gone through the record and find that the Ld. CIT(A) has gone through the root of the matter, examined the disallowance and allowed the appeal of the assessee. The presence of the Ld. CIT(A) during the hearing gave us much needed input for adjudication of the case. Hence, we decline to interfere with the order of the Ld. CIT(A) on this issue. 7. Ground No. 2 relates to deletion of ₹ 7,60,092/- on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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