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2015 (10) TMI 1003 - AT - Income TaxAddition on account of reallocation of expenses relating to raw materials, manufacturing expenses, administrative expenses, selling expenses and financial expenses amongst Unit-I & Unit-II in proportion to the sales in these units - CIT(A) deleted the addition - Held that:- CIT(A) while granting partial relief has noted that similar addition made by the A.O in the preceding year [2015 (9) TMI 1340 - ITAT AHMEDABAD] was not approved by his predecessor in 2007-08 and further A.O has not pointed out any specific defect in the books of accounts which have been audited. He has further given a finding that Assessee has kept separate production record for both the units which indicate the quantitative of raw material consumed and production as per excise law. He therefore held that A.O was not justified in re-allocating the expenses in proportion to the sale in both the units. However, with respect to certain other expenses, he has noted that the procedure followed by Assessee for allocating the expenses were not logical and without any documentary evidence and with respect to those expenses he had directed to the A.O to apportion the expenses in the ratio of turnover. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A) We further find that while dismissing the appeal of Revenue for A.Y. 2007-08 in Assessee’s own case wherein CIT(A) while deleting the addition has noted that no defect or the differences in the product, process, raw materials, end users etc. have been pointed by Revenue and the A.O has proceeded to calculate the income of the 2 units on a wrong assumption. He has further noted that the addition has been made on a hypothetical formula by the A.O - Decided against revenue.
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