TMI Blog2016 (1) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out any defect in the financial statement and separately maintained books of accounts of the assessee and the AO has not raised any doubt in regard to the correctness, completeness of the financial statement and results of the assessee, then the notional disallowance made by the AO by taking proportionate sales of eligible 80IC and non 80IC units cannot be held as sustainable and in accordance with law. Under the above-noted factum and circumstances, the action of the AO in reducing the claim of deduction u/s 80IC cannot be held as correct and justifiable and thus we are inclined to hold that the ld. CIT(A) was rightly in directing the AO to delete the impugned addition. We are unable to see any ambiguity or perversity or any other valid reason to interfere with the order of the first appellate authority - Decided against revenue - ITA No.5426/Del /2012 - - - Dated:- 30-9-2015 - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Appellant : Shri K.K. Jaiswal, DR For The Respondent : Shri Amit Goel, CA ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal by the Revenue has been preferred against the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales allocated to the eligible 80IC units and non 80IC units, made the impugned disallowance and reduced the deduction claimed by the assessee u/s 80IC of the Act. 4. Aggrieved by the above assessment order, the assessee preferred appeal before the ld. CIT(A) which was allowed by passing the impugned order and the AO was directed to delete the entire impugned addition. Now the aggrieved revenue is before this Tribunal in this second appeal with the grounds as reproduced hereinabove. 5. We have heard the arguments of both the sides and have carefully perused the relevant material on record. The ld. D.R supporting the action of the AO submitted that in the consolidated profit and loss A/c of all the units, the assessee company had claimed expenses on account of director s remuneration, tender fee expenses and commission and there was no reason or basis for the said allocation. The ld. D.R further submitted that the assessee also claimed travelling expenses, legal and professional charges and audit fee expenses, hire from non 80IC units with the intention to reduce tax liability of non 80IC units, therefore, the AO was quite justified in making disallowance in this regard an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses have been booked in the respective units on actual basis viz the expenditure have been booked in units to which they pertain and hence the action of the AO in allocating expenses in ratio of sales is totally arbitrary, unjustified and patently wrong. The ld. A.R lastly contended that the AO has not pointed out any instances of any expenditure of 80IC units booked in any non 80IC units and, vice versa. Therefore, the view taken by the AO is not sustainable and in accordance with law. The ld. A.R also contended that the AO was wrong in holding that the expenses should be in some proportion of sales in various units. 8. Supporting the conclusion of the ld. CIT(A), the ld. A.R placed his reliance on the ratio of the decision of the ITAT Mumbai in the case of DCIT Vs. Reliance Infrastructure [2011] 9 ITR [Trib] 84 and submitted that the AO was not justified in allocating head office expenses on the basis of turnover instead of method of allocation of expenses as adopted by the assessee. The ld. A.R also took us through the findings of the first appellate authority at para 4.2 at page 6 of the impugned order and submitted that the assessee has submitted separate audited balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order, we find that the AO in para 5 of the assessment order has noted that separate profit and loss account and balance sheet in respect of two units i.e, one at Haridwar and the other at Dehradun had been furnished. Perhaps the doubt was raised in the mind of the AO while comparing the profit and loss account of these two units with the consolidated profit and loss account of the assessee company wherein he noted that certain expenses have been allowed to the 80IC units and non 80IC units disproportionately. At the same time, we observe that the AO has not raised any doubt about the correctness, completeness and finalized results of the assessee company emerging from the audited reports. The AO has ignored this vital fact that the assessee company is maintaining separate books of account for 80IC and non 80IC units, which have been examined, verified and audited by the auditors and the auditors duly certified claim of deduction u/s 80IC of the Act of the assessee company. We cannot ignore this fact that the assessee submitted separate audited statement of account of 80IC units and non 80IC units before the AO and discrepancy or deficiency was pointed out by the AO in th ..... 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