Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 951 - ITAT DELHIDisallowance u/s 10A - allocation of expenses made by the assessee to 10A eligible units and non 10A eligible units was not appropriate - assessee has established “cost codes” to record every cost in its accounting system for non 10A units and 10A units. It has also common cost codes for recording common costs incurred with respect to non 10A units as well as 10A units - HELD THAT:- The assessee furnished explanation / justification for allocation of expenses before the Ld. CIT(A) as also before us. CIT(A) recorded the finding that the manner of allocation of expenses between 10A units and non 10A units are based on common principles of costing and is reasonable. We agree with the findings of the Ld. CIT(A). CIT(A) further observed that the assessee is following the basis as provided by Accounting Standards-17 approved by ICAI for apportionment of expenses between different units. DR could not contradict and the above finding of the Ld. CIT(A) remained uncontroverted by the Revenue. If that be so, without bringing on record any adverse material, the accounting standard followed by the assessee for apportionment of expenses between different units cannot be faulted. We do not find any substance in the written submission filed by the DR in support of the apportionment of expenses in proportion of the revenue earned by 10A units and non 10A units done by the Ld. AO in both the AYs. Accordingly, we endorse the findings of the Ld. CIT(A) that the allocation of expenses between 10A units and non 10A units made by the assessee cannot be disturbed and therefore, the disallowance of deduction in AY 2007-08 and AY 2008-09 respectively under section 10A of the Act has rightly been deleted by the Ld. CIT(A). The grounds taken by the Revenue in this regard in both the AYs are rejected. - Decided in favour of assessee.
|