9911796707
TMI Blog2021 (9) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and circumstances of the case and also in law, the Ld. CIT(A) erred in allowing the allocation of common expenses on the basis of net profit ratio of the Units as against the ratio of turnover applied by the AO while calculating the deduction u/s 80-IC of the I.T.Act. 2. On the facts and circumstances of the case and also in law, the Ld. CIT(A) erred in deleting the addition of Rs. 5,44,32/-nmay by the AO u/s 14A of the I.T.Act, 1961 read with Rule 8D of the I.T.Rules, 1961in spite of the fact the decision on this issue is pending in Hon'ble Supreme Court in the case of Maxopp Investment Ltd. and in view of the facts that the financial expenses and administrative expenses debited in the P & L a/c are also relatable to the inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of documents available on the file. 6. We have heard the ld. Departmental Representative for the revenue to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO. 1 : 7. Ld. CIT(A) reversing the findings returned by AO directed to allocate common administrative office expenses for the purpose of claim made u/s 80IC on the basis of net profit by accepting the contention of the assessee that the profit ratio is distorted if allocation of common expenses is done on the basis of turnover. 8. We have perused the assessment order passed by Ld. CIT(A). Ld. CIT(A) relied upon the order passed by Tribunal in case of Corning SAS-Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Daman Unit, and assessee has not given any basis for allocating such expenses, details given hereinabove, to Daman Unit. Therefore, The AO has adopted the expenditure for each of the unit on the basis of turnover and after deducting the actual expenditure allocated by the assessee; he arrived at aggregate amount of Rs. 73,45,083, details given hereinabove, and has stated that assessee has under allocated the expenditure to inflate profits and gains of eligible unit. During the course of hearing, ld A.R. could not give details on the basis of which it has allocated the expenditure under the heads, as mentioned hereinabove, to its Daman Unit. There is no dispute to the fact that while computing profits and gains of an eligible business, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee", one should interpret and understand them by the meaning that the standalone unit has to be given to such eligible business. In other words, "as if such eligible business was the only source of income" shall mean that the alleged indirect expenditure or common or head office expenses were incurred for such eligible business, the only source of income of the assessee. Consequently, all the indirect expenses or common expenses have to be considered for the said computation. Thus, the provisions of section 801B(1) convincingly advocate for the allocation of indirect expenses towards the Silvasa Unit as well." 15.1 In the case before us, there is no dispute to the fact that the total turnover of the eligible unit i.e. Daman Unit is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A read with Rule 8D made disallowance of Rs. 54,432/- on the ground that expenses relatable to the earning of exempt income by the assessee are required to be disallowed. 14. Perusal of the assessment order passed by the AO shows that complete facts have not brought on record as to how much was the exempt income earned by the assessee during the year under assessment; as to whether any interest bearing funds have been used for the purpose of investment so as to apply the provisions contained u/s 14A read with Rule 8D. Even reply filed by the assessee has not been brought on record. 15. At the same time, Ld. CIT(A) has also returned cryptic findings that : "Since, on ground nos. 2, 3 and 4, on identical facts, the CIT(A)-6, Delhi has d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
