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2017 (1) TMI 1203 - ITAT AHMEDABADDeductions u/s. 80IB - allocation of Managerial Commission and salary and wages in the ratio of turnover to the Silvassa Unit-I and II - Held that:- The assessee has maintained separate books of accounts for Silvassa unit-I & II as evident from the two Audit Reports exhibited at pages 7 to 19 and 20 to 33 of the paper book. A perusal of the orders of the authorities below shows that the allocation of expenses have been made more out of compulsion then out of necessity. In our considered opinion and the understanding of the facts, the A.O. has not pointed out any flaw or defect in the allocations statement exhibited elsewhere. We find force in the contention of the ld. counsel that the Managerial Commission cannot be allotted to the Silvassa unit. We also agree that only expenses relating to the concerned undertaking should be deducted from the profits thereon. In the absence of any direct nexus brought on record by the revenue authorities for the impugned allocation of expenses, we do not find any merit in the said allocation. We, accordingly, direct the A.O. to delete the allocations re-drawn by him. This grievance is accordingly allowed. Double allocation of Managerial Commission - Held that:- We find force in the contention of the ld. Counsel. We find that the assessee has already included the managerial commission and remuneration while allocating common expenses to the Silvassa unit. The A.O. has once again included these expenses while computing the reallocation. We, accordingly, direct the A.O. to verify the computation once again and decide the issue afresh in the light of our findings given for ground no. 1. Ground no. 2 is treated as allowed for statistical purpose.
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