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2023 (3) TMI 50 - ITAT RAJKOTRevision u/s 263 - deduction for creation of special reserve from the profit of “eligible business” as per Section 36(1)(viii) - HELD THAT:- The detailed working of computation of deduction u/s 36(1)(viii) of the Act had been furnished by the assessee along with giving scientific and cogent basis for the same. The basis of allocation of all elements of income and expenses ,both direct and indirect was given,pointing out that it was in accordance with fundamental principles of cost apportionment as laid down by Cost Accounting Standards issued by the Institute of Cost Accountants of India. CIT having not pointed out any infirmity in the same to the assessee, and even the infirmities pointed out in his order u/s 263 of the Act not addressing this explanation of the assessee, there is no error in the order of the AO found by the PCIT. Even otherwise, we have noted that this assessee’s basis of calculating claim of deduction u/s 36 (1)(viii) has been consistently accepted and approved by the CIT(A) in preceding assessment years, i.e. AYs 2014-15 and 2012-13. AO therefore, accepting the assessee’s claim of deduction in the impugned year, has taken a plausible view. We hold that there was no error in the order of the AO accepting the assessee’s claim of deduction under Section 36(1)(viii) of the Act and the order passed by the Ld. Pr. CIT under Section 263 of the Act is, therefore, set aside. Appeal of the assessee is allowed.
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