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TMI Blog2013 (10) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions made by assessing officer in assessment year 200304 has not been upheld by ITAT whereas in fact in that year, ITAT has upheld 15% of the disallowance on this issue." 2. (a) "Whether on the facts and in the circumstances of the case and in law, CIT(A) had erred in holding that for computing amount of deduction under section 80IC of the income tax act for Baddi unit, common expenses of head office of assessee do not require reallocation by following the decisions of ITAT in A.Y. 2003-04 an by following the decision of the predecessor CIT(A) in A.Y. 2007-08 when assessee itself admitted the fact that these expenses are not properly allocated and assessee has further admitted that these expenses cannot be related with reasonable accur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as well as all the material facts relevant thereto are similar to assessment years 2001-02 to 2004-05, we respectfully follow the order of the Tribunal for the said years and hold that the expenses incurred by the assessee on gifts to Doctors cannot be disallowed by invoking Explanation to section 37(1) of the Act. We therefore direct the A.O. to consider the allowability of the said expenses under the provisions of section 37 of the Act after necessary verification. Ground No. 1 of Revenue's appeal is accordingly dismissed". 5. Since the issue has been restored to the file of the AO in assessment years 2001-02, 2002-03 & 2008-09, respectfully following the order, we set aside the order of the CIT(A) on this issue and restore the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portionment on the basis of percentage of sales would have been the proper alternative It is seen from the details of sales for the year that as against total sales of ₹ 350.63 crore, the sale of Baddi Unit is ₹ 139.43 crore i.e. it constitutes 40% of the total sales. Accordingly the common expenses have to be apportioned to the Baddi unit at 40% of the expenses. The allocation of various expenses is accordingly worked out as under:- Expenses % applied Total expenses Allocation to Baddi Unit Expenses Shown Excess (Shortage) Packing & delivery charges 40% 12,59,34,679 5,03,73,872 4,48,27,598 55,46,274 R&D Expenses 40% 9,23,49,270 3,69,39,708 0 3,69,39,708 Analytical Exp. 40% 1,87,65,837 75,06,335 40,87,873 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained finality at CIT(A) stage, as held by the Hon'ble Bombay High Court decisions, wherein, the Hon'ble High Court had discussed the appeal filed by the department. Moreover, the issue squarely stands covered by the decision of the coordinate bench in assessment year 2008-09 in ITA No. 7371, 7372 & 7373/Mum/2011, wherein the coordinate Bench had given the relief to the assessee. Even on facts, the AR pointed out to the table reproduced by the AO in the assessment year that the assessee had suo moto allocated expenses towards Packing & delivery charges and analytical expenses. He further submitted that R&D expenses and depreciation could not be and would not be allocable because these were independent expenses and since separate books have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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