Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 909 - AT - Income TaxDeduction u/s 10B of the Act – Proper allocation of commission and salary expenses not made – Held that:- Only Amritsar unit is eligible for deduction u/s.10B having manufacturing facilities - The Mumbai unit is only engaged in trading and hence is not eligible for deduction - Insofar as the allocation of commission and salary between the two units is concerned, the Assessing Officer has adopted a very reasonable manner in such bifurcation in the ratio of turnover of the two units - no exception can be found to the view taken by the learned CIT(A) in upholding the allocation of commission and salary between the two units in the ratio of their respective turnovers – the order upheld. Deduction in respect of export incentive u/s 10B of the Act – Held that:- The decision in Maral Overseas Ltd. vs. Addl. CIT [2012 (4) TMI 345 - ITAT INDORE] - the export incentives form part of `profits of the business' of the eligible undertaking and hence cannot be excluded from the eligible profit for the purpose of computing deduction u/s.10B – order set aside. Denial of Deduction in respect of Interest income u/s 10B of the Act - So long as a particular item of income falls under the head 'profit and gains of business or profession', the same qualifies for consideration under this section – If the item of income falls under any other head including `Income from other sources', the same goes out of the ambit of the eligible profits for the purpose of deduction u/s 10B - The correct nature of the amount of interest is not emanating from the material on record - order set aside and the matter remitted back to the AO for fresh adjudication – Relying upon ACG Associated Capsules Pvt. Ltd. VS. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA] - `netting of interest' is relevant in the context of Explanation (baa) below section 80HHC(4C) defining the expression `profits of the business' - It has no application under sec. 10B, which is differently worded and has no definition of the expression `profits of the business' similar to that of section 80HHC – Decided partly in favour of Assessee. Penalty u/s 271(1)(c) of the Act – Reduction in amount of deduction u/s 10B of the Act – Held that:- The foundation for the imposition of penalty is the reduction in the amount of deduction u/s.10B - The amount of such deduction is backed by audit report in form no. 56G as per the requirements of sub-section (5) of section 10B - Once the assessee makes a claim on the basis of an opinion expressed by an expert, there can be no question of imposition of any penalty on the mere fact that the amount of deduction was reduced by the Assessing Officer - There can never be any doubt on the bona-fide of the assessee in claiming the deduction based on the audit report given by the auditor - the CIT(A) was justified in deleting the penalty u/s. 271(1)(c) – Decided against Revenue.
|