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2016 (12) TMI 545 - AT - Income TaxAllocation of expenses relating to the Head office to the SEZ unit - Held that:- It is not in dispute that both Head office and SEZ unit are under common management. Further there is interlacing of funds also. The books of accounts of both the units were maintained by the assessee only. Hence it cannot be altogether ruled out that the benefit of various expenses booked in the Head officer did not go to the SEZ unit. The expenses listed out by the AO and confirmed by Ld CIT(A) such as Foreign tour expenses, motor car expenses, office expenses, printing & stationery etc., are common in nature and SEZ unit could have also been benefitted by the those expenses. A.R submission that the Block insurance policy was taken only for Head office and not for SEZ unit requires examination. Accordingly we restore the issue relating to “Block insurance policy” to the file of the AO with the direction to examine the relevant policy documents and if it is found that the same has been paid in respect of Head office only, then the AO should exclude the same from common expenses. In respect of remaining expenses confirmed by Ld CIT(A), in our view, the order of Ld CIT(A) does not call for any interference, since the allocation of those expenses in the sales ratio appears to be reasonable. Accordingly we confirm the order passed by Ld CIT(A) in respect of remaining expenses. - Decided partly in favour of assessee
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