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2012 (11) TMI 660 - AT - Income TaxAllocation of administrative and general expenses – Held that:- Actual direct expenses are to be allocated directly and the common expenses, has to be apportioned on a reasonable basis, which has been done by the AO in the present case and hence, no interference is called for - allocation of administrative expenses and general expenses amounting to Rs.3.86 Lakhs and Rs.438.79 lakhs towards Daman & Baddi units respectively for computation of deduction u/s 80IB is upheld – against assessee Disallowance u/s 14A of the Act in respect of the Director’s Remuneration – alleged that appellant has received dividend from mutual fund which is exempt u/s 10(35) of the I.T. Act – Held that:- matter remitted back to AO for fresh decision. Allocation of interest expenses - allocation of interest expenses to the Baddi unit in the ratio of turnover against the allocation made by the appellant on the basis of investment while calculating profit eligible for deduction u/s.80IC of I.T. Act – alleged that appellant has a common pool of funds as well as common bank accounts for its entire business being carried out from headquarters - A.O. therefore allocated interest proportionately to this unit on the basis of ratio of sales of the undertaking – Held that:- Appellant has claimed that since no other specific loans were taken for establishment of the said unit, no interest cost should be allocated to the said unit - total investment in Baddi Unit and Daman Unit is very low inasmuch as 0.28% and 0.09% respectively, as compared to investment in other unit - It is perfectly justified in making the interest allocation at Rs.3.60 lakhs in case of Daman Unit and at Rs.1.16 lakhs in case of Baddi Unit on the basis of ratio of investment in fixed assets and in directing the AO to modify the calculation accordingly - in favour of the assessee Grant of relief to the extent of allocation of the salary already made by the assessee - allocation of salary expenses on the basis of the sales ratio on the Daman unit u/s. 80IB and Baddi unit u/s. 80IC of the Act – Held that:- To the extent of allocation of salary already made by the appellant, the same should be reduced to avoid double disallowance - direct the A.O. to grant relief accordingly - CIT(A) has in principle approved the stand of the A.O. but he has given direction to the A.O. that to the extent of allocation of salary already allocated by the assessee, the same should be reduced to avoid double disallowance. He has not given finding as to what extent, there is double disallowance - this aspect should be examined by the A.O - matter remanded back to the file of the A.O
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