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2015 (10) TMI 1584 - ITAT MUMBAI

2015 (10) TMI 1584 - ITAT MUMBAI - TMI - Deduction claimed u/s. 80- IC - CIT(A) allowed the claim - Held that:- We find force in the submissions of the Ld. DR. Prima facie there appears to be difference in the sale figure taken by the AO and by the Ld. CIT(A). Such factual errors cannot be brushed aside lightly, therefore, in the interest of justice and fair play, we restore this issue to the file of the AO. The AO is directed to decide the claim of deduction denovo after giving reasonable and s .....

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is an appeal by the Revenue preferred against the order of the Ld. CIT(A)-7, Mumbai dt. 18.3.2011 pertaining to assessment year 2007- 08. 2. The Revenue has raised four substantive grounds of appeal. The grievance of the Revenue revolves around the deduction claimed u/s. 80- IC of the Act. 3. Briefly stated the facts of the case are that the assessee is in the business of manufacturing and selling of energy saving devices and Lighting products. Return of income for the year was filed on 26.10.20 .....

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onal sales of ₹ 4,98,39,462/-. The AO further found that the profit from this unit has been shown at ₹ 78,11,08,000/- and the profit eligible for deduction u/s. 80IC has been computed at ₹ 75,68,72,400/-. 3.1. The AO was of the firm belief that Inter Divisional sales shown by the assessee from one unit to another unit cannot be part of sales generating business profit making it eligible for deduction. The AO proceeded by reducing the business profit of Solan unit by ₹ 4,9 .....

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stomers at listed price. Thus, for the company, sales are recognized only when the customer is taking delivery as no profit is earned till such stage as stocks at all levels are always valued at cost. The Ld. CIT(A) was convinced with this explanation and deleted the addition. 5. Before us, none attended on behalf of the assessee therefore we heard the Ld. Departmental Representative at length and carefully perused the orders of the authorities below. We find that the Ld. CIT(A) has deleted the .....

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efore, restore this issue to the file of the AO to decide denovo after giving reasonable and fair opportunity of being heard to the assessee. 6. Proceeding further, the AO noticed that part of the Head Office expenses have been attributed towards Solan Unit before claiming deduction. The assessee was asked to explain the basis on which such amount has been worked out. In its reply, the assessee stated that 15% of Nashik/Thane Head Office/Western Region site expenses are allocated to Solan Unit a .....

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vinced with the reply filed by the assessee. In particular, the selection of 15% or 10% without any basis or rationale. After considering the facts in totality, the AO proceeded to allocate common expenses in the ratio of sales turnover and made an addition of ₹ 5,74,79,168/-. 7. Before the Ld. CIT(A), the assessee strongly contended that there is no reason to allocate common expenses relating to sales from oil division. The Ld. CIT(A) though convinced by the allocation of expenses in prop .....

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