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2016 (1) TMI 741 - ITAT DELHIExcess deduction u/s 80IC - whether the assessee has claimed less expenses against 80IC units, thereby manipulating the accounts? - AO held that the assessee has claimed travelling expenses, legal and professional expenses, tender fee, commission, audit fee and director’s remuneration disproportionately without any basis and the same was to be allocated and claimed in proportionate to the sales allocated to the eligible 80IC units and non 80IC units, made the impugned disallowance and reduced the deduction claimed by the assessee u/s 80IC deleted by CIT(A) - Held that:- We are in agreement with the conclusion of the ld. CIT(A) that the expenses like travelling, legal and professional fees, tender fees, commission etc are in the nature of direct expenses which can be linked to the sales of respective units. While the assessee is maintaining separate books of account supported by bills and vouchers and all relevant details which were audited by the competent auditors and the claim of the assessee u/s 80IC of the Act was also verified and certified, then while the AO has not pointed out any defect in the financial statement and separately maintained books of accounts of the assessee and the AO has not raised any doubt in regard to the correctness, completeness of the financial statement and results of the assessee, then the notional disallowance made by the AO by taking proportionate sales of eligible 80IC and non 80IC units cannot be held as sustainable and in accordance with law. Under the above-noted factum and circumstances, the action of the AO in reducing the claim of deduction u/s 80IC cannot be held as correct and justifiable and thus we are inclined to hold that the ld. CIT(A) was rightly in directing the AO to delete the impugned addition. We are unable to see any ambiguity or perversity or any other valid reason to interfere with the order of the first appellate authority - Decided against revenue
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