TMI Blog2018 (4) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... the previous year also we do not find any infirmity in the order of the ld. CIT(A) which warrants our interference Addition under the head Misc. expenses - Held that:- A sum of ₹ 14,58,007/- was on account of tax against stock transfer. The assessee was asked to explain the nature of such payments and since the assessee failed to offer any satisfactory explanation for the same, the assessee’s claim for such expenses were not allowed by the Ld. CIT(A) and, therefore, he deducted the said amount from the total misc. expenses claimed of ₹ 17,36,842/- and directed the AO to allow only ₹ 2,78,838/-. Against the said order of Ld. CIT(A) the Ld. DR was unable to point out any defect or infirmity which need our interference. Therefore, we are not inclined to interfere with the order of the Ld. CIT(A) and we confirm the same. Claim in respect to custom duty and entry tax - Held that:- As the entire amount was paid during the year itself and there was no outstanding at the year end and thus, the Ld. CIT(A) held that disallowance u/s. 43B of the Act also does not arise. - Revenue appeal dismissed - I.T.A. No. 48/Kol/2015 - - - Dated:- 20-9-2017 - Shri A. T. Varkey, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O gave proportionate deduction which order was challenged by the assessee before the Ld. CIT(A)-V, Chennai who by his order dated 31.03.2011 allowed the assessee s full claim for deduction u/s. 80IC of the Act. First of all, we note that the main grievance of the Revenue is that there is a violation of Rule 46A of the Rules while passing the impugned order. In this context firstly, we note that while passing the impugned order, the Ld. CIT(A) has sought the remand report from the AO and the remand report obtained from AO has been reproduced by ld CIT(A) at pages 5, 6, 7 and 8 of the order, so the ground of challenge of revenue is per-se weak. However, we would like to discuss the brief facts of the case. We note that the assessee is in the business of manufacturing tailormade rubber molded and metal bonded items. The assessee supplies to Indian Railways and to approved wagon builders as per the drawings and specification of Indian Railways under the category of exclusive commodity. Assessee has declared a total turnover of ₹ 62,51,97,114/- for this assessment year. During assessment proceedings, the AO noticed that the assessee had units at Lucknow, Kolkata, Chennai and Dehra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in this assessment year is ₹ 6.24 cr. We note that the net profit percentage was 7.18% for AY 2008-09 and net profit percentage for this year was 10.84%. The turnover of Derhadun unit for AY 2009-09 was ₹ 5.59 cr. whereas in the relevant assessment year it is ₹ 17.51 cr. Dehradun profit for AY 2008-09 was ₹ 2.52 cr. whereas in the relevant assessment year it was ₹ 4.70 cr. Thus, the Dehradun net profit percentage for AY 2008-09 was 48.04% and for the relevant AY it is only 26.84%. Thus, we note that the Dehradun units net profit percentage in the previous assessment year was 45.08% whereas in the relevant assessment year it is 26.84% which is less than the previous year and in the previous assessment year the AO himself has allowed proportionate deductions which was later given full deduction by Ld. CIT(A) on appeal by assessee. The assessee explained the reason for better turnover and production of goods by stating that the production facility at Dehradun comprises of new machines and it can produce double quantity at the same time. Further, there are fewer breakdowns resulting in savings in raw materials wastage and also lower cost. The assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e misc. income as taken in the P L Account. We concur with the view expressed by the Ld. CIT(A) taking into consideration the fact that the AO could not point out any defects in the books of account maintained separately for the Dehradun unit and during remand proceedings when the Form 10CCB was produced before the AO, he could not point out any fault. We also note that there was no material to allege that there was shifting of expenses of eligible unit to non-eligible unit so that higher deduction can be claimed for 80IC unit at Dehradun. The Dehradun unit had new machineries and there were excise exemption also and thus, the profits generated at Dehradun unit cannot be termed as unnatural without any material to suggest the other way; and taking into consideration the results of the previous year also we do not find any infirmity in the order of the ld. CIT(A) which warrants our interference. In such a scenario, we concur with the view of the Ld. CIT(A) and we are inclined to dismiss the appeal preferred by the revenue on this issue. 8. Ground no. 3 is against the action of the Ld. CIT(A) in deleting the sum of ₹ 2,78,838/- out of the total addition of ₹ 17,36,842/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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