TMI Blog2019 (1) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... on whole R D expenditure - setting aside the issue of allocation of R D expenses to Baddi unit for computation of deduction u/S 80-IC to the record of Assessing Officer for finding out whether R D expenditure incurred has any direct nexus to Baddi unit when both these issues are interlinked? - as per ITAT withdrawal of the weighted deduction under Section 35(2AB) is not justified and also noted that merely because the respondent had allocated R D expenditure on pro rata basis to its Himachal Pradesh unit, it would not operate a bar to raise a claim subsequently, if otherwise it is correct in law - Tribunal set aside the issue of allocation of R D expenses to the unit in Himachal Pradesh i.e Baddi for computing deduction under Section 80IC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/S 80-IC to the record of Assessing Officer for finding out whether R D expenditure incurred has any direct nexus to Baddi unit when both these issues are interlinked? (3) Whether on the facts and in circumstances of the case and in law, the Tribunal was right in deleting the enhancement of income made by CIT(A) by setting it aside even though the assessee has wrongly claimed double deduction of R D expenditure of amount ₹ 5,64,26,552/- against both Baddi unit and Maharashtra units? 3. Regarding Question No. (1) :- (a). We note that the impugned order of the Tribunal allowed the appeal of the respondent assessee holding that Arm's Length Price of corporate guarantee cannot be determined on the basis of the Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80-IC of the Act in its return. (c) However, during the assessment proceedings, the respondent claimed that there was no R D facility at Himachal Pradesh unit, thus expenses incurred on R D facility at Maharashtra unit could not be allocated on pro rata basis to the Himachal Pradesh Unit. Therefore, the deduction under Section 80IC of the Act be given to Himachal Pradesh unit after adding back the above expenses. This was not accepted by the Assessing Officer. On the contrary, by order dated 30.11.2011 pursuant to Section 143(3) of the Act, enhanced the allocation of R D expenses to its Himachal Pradesh unit from ₹ 5.64 crores to ₹ 8.46 crores. Thus, reducing the relief under Section 80-IC of the Act. (d) Being aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that merely because the respondent had allocated R D expenditure on pro rata basis to its Himachal Pradesh unit, it would not operate a bar to raise a claim subsequently, if otherwise it is correct in law. It placed reliance upon the decision of this Court in Zandu Pharmaceuticals Works Ltd Vs CIT 350 ITR 366 wherein it has been held that the expenses incurred on R D work cannot be appropriated to a unit which does not itself incur R D expenditure. Thus, on the above facts, the Tribunal by the impugned order dated 27.2.2015 set aside the issue of allocation of R D expenses to the unit in Himachal Pradesh i.e Baddi for computing deduction under Section 80IC of the Act to the Assessing Officer. This after directing him to give a definite f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot take advatage of any excess income offered by the assessee to tax erroneously....... (h) We are informed that consequent to the impugned order of the Tribunal on 31.3.2017, the Assessing Officer passed an order in compliance with impugned order dated 27.2.2015 passed by the Tribunal in respect of assessment year 2009-10. (i) In the above view, both the questions as proposed does not give rise to substantial question of law. It merely restored the issue for the Assessing Officer to determine facts and apply the law in accordance with the binding decision of this Court in Zandu Pharmaceuticals Works Ltd (supra). Thus, both the questions are not entertained. 5. Accordingly, appeal dismissed. No order as to costs. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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