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2015 (9) TMI 61 - AT - Income TaxReduction in the disallowances under sections 80IA and 80IC - Allocation of remuneration to directors, audit fee and travelling expenses towards income of unit exempt under sec. 80IA and 80IC - Held that:- We do not find reason to interfere with the orders of the authorities below regarding the making of reduction in the disallowances under sections 80IA and 80IC of the Act on account of reallocation of directors’ remuneration, travelling expenses etc. on proportionate basis by the Assessing Officer in absence of the evidence furnished by the assessee that all the expenses were separately maintained in the eligible units as relying on earlier assessment years. We, however, find substance in the alternative arguments of AR that the allocation made by the Assessing Officer on the proportionate basis was excessive and disproportionate inasmuch as allocation of directors’ remuneration, travelling expenses and audit fee etc. to the Punjab Paper Unit amounted to double directors’ remuneration, travelling expenses etc. for Kala Amb Unit. We thus set aside the matter to the file of the Assessing Officer to examine the alternative contention made by the Learned AR in this regard and while allocating the expenses to the eligible units take into consideration the expenses, if any, already debited by the assessee in these eligible units while computing the deduction claimed under sec. 80IA and 80IC of the Income-tax Act, 1961 on proportionate basis to avoid double addition, after affording opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. Reduction of insurance claim received from the income eligible for exemption under sec. 80IC reducing the exemption - Held that:- Assessing Officer following the decision of Hon'ble Supreme Court in the case of Liberty India (2009 (8) TMI 63 - SUPREME COURT) held that there is no first degree nexus between the insurance/interest receipt and business undertaking hence, it does not form part of net profit of eligible industrial undertaking and the same cannot be treated as income derived from industrial undertaking. The Learned CIT(Appeals) has upheld the same with this noting that the assessee did not furnish evidence to substantiate that the claim that these were only repair expenses and not capital expenses. He noted further that ₹ 2,00,921 on account of fall of factory wall was already taken into consideration by the assessee.Since the assessee has failed to improve its case before us on the issue, we do not find reason to interfere with the first appellate order in this regard. Same is upheld. - Decided against the assessee.
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