9911796707
TMI Blog2016 (2) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ng exemption u/s 10B: 2.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) grossly erred in not deciding the principal issue of adjustment/set off of brought forward losses and depreciation of non eligible unit against profit of eligible unit for computing deduction u/s lOB and stating that the Assessing Officer has not made set off while computing deduction u/s 1013, hence contention of the Appellant is not acceptable. 3. Re: Reallocation of Salary of Rs. 10,88,678/- on the basis of turnover for computing profit eligible for deduction u/s 10B: 3.1 On the facts and in the circumstances of the case, the learned CIT (A) has grossly erred in confirming the Assessing Officer's action regarding reallocation of salary of Rs. 10,88,678/- on turnover basis without appreciating that the Appellant had correctly allocated salary of actual basis. 4. Re: Non-consideration of additional ground of appeal in respect of the interest income of Rs. 1,17, 254/- included twice while computing the Gross Total Income: 4.1 On the facts and in the circumstances of the case, the learned CIT(A) grossly erred in not adjudicating the additional ground of appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aggrieved, assessee preferred appeal before the first appellate authority. 7. Before the learned Commissioner (Appeals), it was pleaded by the assessee that brought forward unabsorbed depreciation and business loss of non-eligible unit cannot be set-off of against the current profit of the eligible unit before computing deduction under section 10B of the Act. The learned Commissioner (Appeals), finding that the Assessing Officer before allowing assessee's claim of deduction under section 10B has not made any such set-off unabsorbed depreciation and business loss of non-eligible unit against profits of eligible unit rejected assessee's claim. 8. The learned Counsel for the assessee submitted before us, unabsorbed depreciation and brought forward business loss cannot be set-off / adjusted against the current profit of the eligible unit before computing deduction under section 10B of the Act. For such proposition, he relied upon the decision of the co-ordinate bench in assessee's own case for the assessment year 2005-06 to 2008-09 and the decision of the Hon'ble Jurisdictional High Court while dismissing department's appeal for the assessment year 2006-07 and 2007-08. 9. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture of Rs. 10,88,678 only to the non-eligible unit at Dombivali which, according to the Assessing Officer, should have been allocated to both eligible and non-eligible unit on the basis of turnover. Accordingly, he re-allocated the salary expenditure between the two units on the basis of turnover. Being aggrieved of such re-allocation of salary expenditure, assessee challenged the same before the learned Commissioner (Appeals). 13. Before the first appellate authority, assessee pleaded, as it is maintaining separate books of account for both the units and expenditures also are bifurcated, accordingly, the salary expenditure claimed in respect of non-eligible unit (Dombivili Unit) cannot be re-allocated to both the units. The learned Commissioner (Appeals), after considering the submissions of assessee, noticed that as per Schedule-11 of the Profit & Loss account, expenditure under the head "manufacturing and other expenditure" wages, salary and bonus have been allocated separately to the eligible unit as well as non-eligible unit. Whereas, under Schedule-12 to the Profit & Loss account office administration expenditure consisting of salary expenditure of Rs. 10,88,678, has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eresting to note that while the assessee has allocated directed expenditure relating to wages, salary and bonus to both eligible and non-eligible units, as far as indirect expenditure relating to salary and bonus shown under the head "office and administration expenses" as per Schedule-12 has only been allocated to the non-eligible unit without making any allocation to the eligible unit. This, in our view, is not acceptable. We agree with the learned Commissioner (Appeals) that when the assessee has shown consumption of raw material and packing material at a substantially high figure for both the units and sales turnover of both the units are also substantially high, it is highly improbable that assessee would be incurring indirect expenditure towards salary and bonus only in respect of non-eligible (Dombivali) unit without incurring any expenditure in respect of eligible (Vapi) Unit. When the assessee has set-up two units it is quite natural and logical that assessee must be maintaining administrative set-up for both the units incurring similar expenditure. Therefore, it cannot be accepted that assessee has not incurred any expenditure towards salary and bonus in respect of Vapi U ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
