9911796707
TMI Blog2012 (8) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... take up the ground relating to disallowance of deduction under section 10A of the Act. The AO during the assessment proceedings noted that the assessee had claimed deduction of Rs.27,48,183/- under section 10A of the Act. The AO noted that while computing the profit of 10A Unit, the assessee had not apportioned the common expenses correctly. There was no apportionment of common expenses i.e. managerial remuneration (Rs.16,11,241/-), Board meeting fee (Rs.14,000/-), electricity charges (Rs.56,39,110/-), security upkeep (Rs.15,71,340/-) and auditors remuneration (Rs.1,49,658/-) which aggregated to Rs.89,85,345/-, towards the 10A Unit. The AO, therefore, apportioned the expenses towards 10A unit in the ratio of turnover of the 10A unit and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiterated the submissions made before the lower authorities that since there was profit as per audited account, the assessee was entitled for claim of deduction under section 10A. It was also submitted that even if allocation of indirect expenses had to be made, the expenses on electricity and security charges should have been attributed on the basis of expenses incurred at the place occupied by the unit and not on the basis of turnover. The ld. DR on the other hand strongly supported the orders of authorities below and placed reliance in the findings given in respective orders. 2.3 We have perused the records and considered the rival contentions carefully. The dispute is regarding disallowance of deduction under section 10A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to exempt income correctly. The AO held that expenses had to be computed as per Rule 8D which had retrospective application. Accordingly, he computed expenses relating to exempt income as per Rule 8D amounting to Rs.10,95,820/- in place of Rs.6,13,339/- allocated by the assessee towards exempt income. The AO therefore, disallowed further expenses of Rs.4,82,481/- which was added to the total income. 3.1 In appeal CIT(A) observed that Rule 8D was prospective and not applicable to the assessment year under reference in view of the judgment of Hon'ble High Court of Bombay in case of Godrej and Boyce Mfg. Co. vs. DCIT (328 ITR 81). He, therefore, directed the AO to work out the disallowance as per decision of Hon'ble Jurisdictional Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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