TMI Blog2012 (10) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... and the non-eligible unit run by the assessee company need to be allocated in order to determine the eligible profits of business under section 10B - against assessee. - IT APPEAL NO. 64 (CHD.) OF 2011 - - - Dated:- 9-8-2012 - MS. SUSHMA CHOWLA AND MEHAR SINGH, JJ. Navdeep Sharma for the Appellant. N.K. Saini for the Respondent. ORDER Ms. Sushma Chowla, Judicial Member - This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)-II, Ludhiana dated 01.11.2010 relating to assessment year 2007-08 against the order passed u/s 143(3) of Income Tax Act, 1961 (in short 'the Act'). 2. The assessee has raised the following grounds of appeal: "1. That the worthy CIT(A) erred in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed as withdrawn. 5. The only effective ground of appeal raised by the assessee in the present appeal is ground No. 2 which is in relation to the computation of deduction under section 10B of the Act. The Assessing Officer had recomputed deduction under section 10B of the Act by reallocation of expenditure to the eligible units at Jalalpur and Lalru and assessee is in appeal against the same. 6. The brief facts of the case are that the assessee company was engaged in the manufacturing and trading of different kinds of yarn, hosiery goods and knitted cloth. The assessee during the year had nine different units, out of which it had claimed deduction under section 10B of the Act in respect of two units i.e. one unit No.3 at Lalru and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80IA(8) and 80IA(10) of the Act. It was further pointed out by the learned A.R. for the assessee that both the units were 100% export oriented units and no goods were transferred inter-se between the units. The learned A.R. for the assessee further placed reliance on the decision of Chandigarh Bench of Tribunal in the case of Punjab Con-cast Steel Ltd. v. Asstt. CIT [1994] 49 ITD 430, Punjab Con-cast Steel Ltd. (supra) and on the decision of Punjab Haryana High Court in CIT v. Punjab Concast Steels Ltd. [2011] 336 ITR 248/[2012] 20 taxmann.com 596 and in the case of D.C.W. Ltd. v. Addl. CIT [ITA No. 5969/Mum/2008] Dy. CIT v. D.C.W. Ltd. [ITA No.5960/Mum/2008 relating to assessment year 2005-06 - date of order 29.7.2010]. 8. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed form alongwith return of income. Under section 10B (7) of the Act it is provided that the provisions of sub-sections (8) and (10) of section 80IA of the Act shall apply. Section 80IA(8) of the Act talks of recomputation of deduction where any goods or services held for the purpose of eligible business are transferred to any other business carried on by the assessee and the consideration for such transfer does not correspond to the market value of the goods or the services so transferred. Section 80IA(10) of the Act refers to close connection between the assessee carrying on eligible business with any other person where the course of business between them is so arranged that the business transacted between them produces to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the learned A.R. for the assessee on Punjab Concast Steels Ltd. (supra) is misplaced as the facts in the case of Punjab Concast Steels Ltd. (supra) before the Hon'ble Punjab Haryana High Court and before us are at variance. 12. Now coming to the recomputation of the profits in the case of the business by allocating proportionate Managing Director's remuneration, debited to non-eligible units of the assessee company, to the eligible unit of the assessee company is admissible or not. Under the provisions of section 10B of the Act the deduction is to be allowed on such profits gains of business which are derived by 100% export oriented undertaking and in order to determine the profits gains of the eligible units, all expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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