TMI Blog2016 (11) TMI 1711X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee by the orders passed by the Kolkata Bench of the Tribunal in the preceding previous years, therefore we do not hesitate to confirm the order passed by the ld. CIT(A). Appeal of the revenue is dismissed. - ITA No. 2112/Kol/2013 - - - Dated:- 23-11-2016 - Hon ble Shri S.S. Viswanethra Ravi, JM And Dr. Arjun Lal Saini, AM For the Appellant : Shri Rajat Subhra Biswas, CIT(DR). For the Respondent : Shri Alok Goenka, ACA/Shri Subhasis De, FCA. ORDER Per Dr. Arjun Lal Saini, AM The captioned appeal filed by the Revenue pertaining to A.Y.2006-07, is directed against the order passed by the Commissioner of Income Tax (Appeals) XII, Kolkata, in Appeal No.919/XII/12/09-10, dated 12.03.2013, which in turn arises out of an order passed by the Ld. Assessing Officer u/s 143(3) of Income Tax Act, 1961 (in short, the Act ), dated 30.12.2009. 2. The facts of the case qua the assessee are that the assessee filed return of income on 30.11.2006 showing total income of ₹ 56,98,30,654/-. The return was duly processed u/s 143(1) of the Act on 05.11.2007. Later on, the case was selected for scrutiny u/s 143(3) of the Act, and the AO has completed the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to Pondicherry unit should be as under:- Turnover of Pondicherry unit Difference in Total Turnover in F.Y.2005-06 F. Y. 1996-97 In other words, instead of taking Total turnover in denominator, Difference of total turnover in F.Y. 2005-06 and F.Y.1996-97 should be taken. Moreover, the total turnover of F.Y.1996-97 should be brought to the level of F.Y. 2005-06 by applying inflation factor since the assessee is applying the inflation factor to the Head office expenses:incurred in Financial Year 1996-97, in order to bring it to the level of Financial Year 2005-06. (a) The above mentioned method applies for expenditure under the head common selling expenses too and also for all the units for which deduction u/s 80-IB of the Act has been claimed by the assessee. This way, the Assessing Officer made the addition of ₹ 3,59,31,662/- on account of method for apportionment of expenditure for all the eligible units. 3. Aggrieved from the order of the ld. Assessing Officer, the assessee filed appeal before CIT(A), who has deleted the addition made by the Assessing Officer. The assessee, before the ld CIT(A), apart from the documents and explanations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee under section 80lB of the Act since the then Ld. CIT, Kolkata-IV, vide his order dated 4th January, 2006 passed under section 263 of the Act held the assessment order for the said year as erroneous and prejudicial to the interest of the revenue and directed the then Assessing Officer to further decrease the deduction claimed by the assessee under section 80IB of the Act, against which the appellant was in appeal before the Hon'ble Tribunal. However, the appellant filed an appeal before the Hon'ble Tribunal against the order passed by the Ld. CIT (A). 5. The Hon' ble Tribunal passed a consolidated order dated 13th August, 2007 (enclosed herewith in Annexure - IV, Page 100 to 117 of the Paper Book) against both the aforesaid orders (order arising out of section 263 CIT(A)'s order). In the said order, after examining the issue at length, it was held by the Hon 'ble Bench that- Respectfully following the decision of the ITAT dated 17th October, 2006 (supra) in the case of the assessee, we are of considered opinion that the Department should have accepted the allocation made by the assessee .... . [Reference is drawn to Annexure - IV, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n arriving at the profits eligible for deduction under section 80IB of the Act and consequently to allow deduction under section 80IB at the aggregate amount of ₹ 33,81,19,725 as has been claimed in its return for the year by the assessee. Based on the above cited submissions of the assessee and merits of the case, the ld CIT(A) allowed the appeal of the assessee stating that issue of allocation of expenditure is covered in assessee`s favour in assessee`s own case in ITA order No. 290/Kol/2006 and 1166/Kol/2006 for A.Y. 2002-03 dated 13.08.2007, which is placed at page No.100 of the Paper Book. 4. Not being satisfied with the order of the ld. CIT(A), the Revenue is in further appeal before us, and has taken the following grounds of appeal :- 1. Whether on the facts and in the circumstqances of the case, Ld. CIT(A) erred in allowing relief of Rs.,30,21,88,063/- u/s 80IB. 4.1. The ld. Departmental Representative (DR) for the revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para, and is not being repeated for the sake of brevity. 4.2. On the other hand, the ld. Authorized Representative (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re on various items discussed by him was ₹ 60 crores. Later on he has taken the amount of ₹ 156 crores on the basis of the entire expenses, booked at head office. He has also observed that it was not possible to correctly apportion the expenditure without resorting to the audit u/s 142 (2A) of the IT Act. He has however, not given the reason why he could not set aside the issue and restore it to the AO for considering the action u/s 142(2A) of the IT Act. On the other hand, the Id. Counsel has pointed out, among other things, that the issue has been duly considered by the ITAT in the case of the assessee for assessment years 2000-01 AND 2001-02 AS PER ORDER DATED 17th October, 2006 (supra), The issue involved was the deduction u/s 80-IB in respect of' Pondicherry unit which started production during the period relevant to A.Yr 1998-99 . The ITAT as per order dated 17th October, 2006 held that the adhoc profit ratio, could not apply consistently in all the years for allocation of expenditure of head office to the eligible unit. It was also held that in addition to the audited accounts of the assessee company, it was maintaining separate accounts for the Pondicherry u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has taken all relevant common HO selling expenses attributable to Pondicherry unit, applied inflation rate @ 5% from F. Y. 1996-97 (i.e. A. Y.1997-98) after arriving at the total common HO selling expenses for the relevant assessment year applied the turnover ratio (turnover of Pondicherry/turnover of the company). From the detailed calculations of allocations of common head office expenses placed at pages 67-68 of the paper book, we note that all the common expenses (viz. MCRE rent - office residence, Office and flat upkeep, law charges, tea room, medical, electricity, rates and taxes, TTP, BP BE, printing and stationery, books and periodical, traveling, LTA, bank charges, in-house computer expenses, cash commission, repacking expenses, HRA, incentive salesman, other expenses, canteen, staff welfare, donation and subscription, directors fees, gratuity, machine accounting, sec. Off expenses, insurance , training development, professional fees, brokerage commission, in-house .Xerox, ESI, shifting expenses, ARB internal. audit expenses etc.) including expenses on salaries, advertisement and sales promotion etc have been duly considered by the assessee for allocation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicial to the interest of the revenue. The order u/s 263 cannot, therefore, be sustained. The appeal of the assessee is, therefore, allowed. ii) ITA Nos.1332 1333/Kol/2008 order dated 20.03.2009. 5. After hearing the rival submissions and on careful perusal of the materials available on record, we are unable to accept the contention of the Ld. DR, keeping in view of the fact that if any grievance is caused to the Revenue against the orders of the ITAT, the same can be questioned at the higher forums and as long as the ITAT orders are not reversed by the higher authorities, judicial proprietary requires that the Coordinate Bench of the Tribunal should follow the orders of the another Bench. Since the Ld. CIT(A) has simply followed the orders of the ITAT in assessee s own case for the earlier two years and the Ld. DR could not bring any materials contrary to the findings of the Ld. CIT(A), we find no infirmity in the orders of the Ld. CIT(A) to be interfered with. Accordingly, we confirm the order of the Ld. CIT(A) and dismiss the appeal of the Revenue. 4.3. Having heard the rival submissions, perused the material available on record, we are of the view that there ..... 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