TMI Blog2017 (12) TMI 1771X X X X Extracts X X X X X X X X Extracts X X X X ..... assing product conceptualization, designing, development of sample lots, testing and commercialization. The benefits of such research is availed by all the units of the assessee and hence the R D expenditure has to be apportioned. AO as well as the CIT (A) have given a concurrent findings. In spite of it, from the entire pleadings it is clear that the assessee has not disputed such facts. It has not laid any material to say that the unit in the Himachal Pradesh has not availed or is not or would not avail the benefits of the impugned R D etc and hence the apportionment made by the AO and as modified by the CIT(A) is upheld. On the above facts and circumstances, the case laws relied on by the assessee are held as not applicable .The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 24,49,009/-as against the admitted income of ₹ 53,12,694/. Aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A) held as under: 4.3 The matter is considered. I am not in agreement with the views of the ld. Authorised Representative. The reliance on the ratio of Liberty India Limited (supra) is misplaced and does not aid the case for the appellant. My reasons for taking this position are the following: 1. The decision in the case of Liberty India Limited (supra) was rendered in the context of deduction under Section 80lB of the Act and more specifically on the position whether there is a 'first degree nexus' between the DEPB credit/duty drawback receipt and the profits. The Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.) Capital expo Other than land and building 13,68,000 Recurring expenditure 3,74,02,000 R D expenditure Total 3,87,70,000 Hence, the allocation of R D expenditure, in my view, is to be limited to 10.01 percent of R D expenditure (other than capital expenditure), i.e. ₹ 3,74,02,000/-. The allocation of amount hence is computed as under: Income from 80lC unit: Net Profit as per computation ₹ 52,12,694/- Less: R D expenditure allocation ₹ 37,47,680/- ------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as these R D expenditures does not relate to HP unit. R D expenditure certified by DSIR is location specific and recognition of R D unit by DSIR is given only for R D unit in Hosur. The relevant section refers the profits derived from the undertaking and hence while computing the profits and gains of the concerned undertaking, only expenses relating thereto can be deducted. In other words, the expenses must be incurred, for and on behalf of the concerned undertaking. The expenses attributable to any other unit or the head office expenses which have no relevance to the industrial undertaking, cannot be deducted in respect of the said undertaking while computing the profits and gains of the undertaking and relied on the decisions of the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on specific and recognition of R D unit by DSIR is given only for R D unit in Hosur. On the other hand, the Revenue pleads that the assessee is carrying out research development activities relating to automotive seating applications. The research activities cover seating applications for Buses, Trucks, Tractors and Two-wheelers. The research activities encompassing product conceptualization, designing, development of sample lots, testing and commercialization. The benefits of such research is availed by all the units of the assessee and hence the R D expenditure has to be apportioned. The AO as well as the CIT (A) have given a concurrent findings. In spite of it, from the entire pleadings it is clear that the assessee has not disputed su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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