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2019 (7) TMI 20 - AT - Income TaxAddition of premium paid to LIC under group gratuity scheme - scheme had been approved by Commissioner vide its order dated 17.03.2017 w.e.f. 01.01.2000 - HELD THAT:- Similar issue arose in assessee’s own case in [2017 (6) TMI 869 - ITAT PUNE], the said issue has been decided in favour of assessee. We find merit in the plea of assessee that once the Commissioner has approved group gratuity scheme of employees of assessee, then the assessee is entitled to the deduction on account of premium paid to LIC group gratuity fund. - ground of assessee is allowed. Disallowance of legal & professional charges - alternative plea to allowabilty of dedction u/s 10B - any addition made to the computation to the total income needs to be allocated over Mahad EOU & Pirangut EOU units, which are eligible for exemption / deduction u/s 10B - HELD THAT:- Tribunal in assessee’s own case in assessment year 2009-10 and vide para 10 the grounds of appeal raised by Revenue in respect of legal and professional charges paid to SRG Consultancy Pte Ltd. were adjudicated. The said issue of payment to SRG Consultancy Pte Ltd. has been allowed by CIT(A) in the instant assessment year and the Revenue is not in appeal. - We find merit in the alternate plea raised by assessee and allowability or its disallowance becomes academic. The deduction under section 10B of the Act merits to be allowed on the enhanced profits of business. - grounds of appeal is allowed Reduction of claim u/s 10B of interest received from MIDC & MSEB - deposits are made for the purpose of carrying on business - HELD THAT:- We find merit in the plea of assessee that interest received from MIDC and MSEB is to be assessed as business income in the hands of assessee, on which deduction u/s 10B is to be allowed. Deduction u/s 10B - deduction reduced invoking of provisions of section 10B(7) r.w.s. 80IA(7) - no transfer of any raw material from Mahad EOU unit and Pirangut EOU unit to Pirangut DTA unit and hence, provisions of section 10B(7) r.w.s. 80IA(8) were not attracted - separate stock records were maintained - finished products were transferred at cost plus 10% as per Excise rules - non of goods transferred at less than market value - HELD THAT:- First step which needs to be met is the transfer of goods or services from one unit to other unit in order to attract provisions of section 10B(7) . The AO has failed to meet the said plea of assessee, which was repeatedly raised before him. In the absence of any arrangement, provisions of section 10B(7) of the Act are not attracted. Assessee has filed tabulated details of receipts and expenditure on year-wise basis. The AO has not disturbed the said allocation of expenses but has restricted the disallowance made on account of employees cost and total intra unit purchases. The assessee has been consistently following this method of allocation of expenses. In assessment year 2007-08, the assessee had made aforesaid allocation of expenses which has not been disturbed by AO in assessment order passed u/s 143(3). Accordingly, we find no merit in the order of AO in this regard and reversing the finding of CIT(A), we allow the claim of assessee in entirety.
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