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2023 (4) TMI 225 - AT - Income TaxDeduction u/s 80-IB(10) - principle of consistency - HELD THAT:- As decided in Maps Enzymes Limited[2019 (8) TMI 1061 - GUJARAT HIGH COURT] when the department thought fit to grant the deduction for four consecutive years, there was no reason to raise any objection with regard to admissibility of such deduction under Section 80JJA in the fifth and the final assessment year 2008-09. Assessee cannot be denied the benefit of the exemption claimed u/s 80IB (10) of the Act as deduction was allowed by the revenue in the initial assessment year. Accordingly, we do not find any merit in the appeal filed by the Revenue. Hence, the ground of appeal of the revenue is hereby dismissed. Deduction u/s 80IB(10) - not allocating the common expenses to the eligible and non-eligible units based on the turnover which has resulted higher amount of deduction to the assessee - HELD THAT:- We note that there is a defect in adopting the basis of allocating the common expenses between eligible and non-eligible projects on turnover ground. It is for the reason that, there can be a situation where the sale of a particular project is of negligible value in a particular year whereas the cost of construction has already been incurred by the assessee. In that eventuality, the financial positions of the assessee will represent distorted position if the common expenses are allocated based on turnover. Thus, assessee has rightly adopted the basis of allocating the common expenses based on the area of construction of eligible and non-eligible projects. Hence, no merit in the ground of appeal raised by the revenue. Thus, the ground of appeal of the revenue is hereby dismissed. Alternate addition made by the AO - AO allocated the common expenses between the sales of all the projects and working progress shown of all the projects being eligible and non-eligible projects and made the addition - HELD THAT:- There is no dispute to the fact that the Revenue in the earlier year has not allocated any common expenses incurred by the assessee on projects in the ratio of the units sold and the units shown as work in progress. Accordingly, we are of the view that the principle of consistency has to be adopted as held by the Hon’ble Supreme Court in the case of Excel Industries[2013 (10) TMI 324 - SUPREME COURT]. In the long run, there will not be any impact on the income of the assessee. It is for the reason that if any addition is made to the work-in-progress shown at the end of the financial year which will certainly enhance the income of the year in dispute but this closing work in progress will become the opening work-in-progress in the subsequent year and the profit of the subsequent year will be reduced by the same amount of addition made in the year under consideration - we direct the AO to delete the addition made by him. Decided in favour of assessee.
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