TMI Blog2022 (7) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the claim as unadmitted. CIT (A) has admitted the claim and decided the issue very laconically placing reliance upon several case laws. There is no discussion in the order of ld. CIT (A) as to who has examined the factual aspect of the case. He simply accepted the statement of the assessee and passed the same as his own order relying upon the case laws and proposition. Even after, referring to the decision in the case of Liberty India ( 2009 (8) TMI 63 - SUPREME COURT] which expounded that indirect expenses which do not have any direct nexus with the undertaking cannot be deducted in computing the profit of the undertaking. He went on to accept that the assessee has been able to establish the direct nexus between income and expenses of the industrial units situated at Samba and Udhampur. He also noted that it is also argued that the indirect and head office expenses have been excluded from allocation amongst exempt and non-exempt units. Based on such reasoning, he has directed the Assessing Officer to re-compute the taxable income. We find that the above exhibits lack of proper application of mind. Without referring to any factual material on the basis of arguments and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The assessee has other units at Chopanki, Distt. Alwar, Rajasthan) Dahej, (Gujarat). The assessee was, therefore, asked to furnish the unit-wise accounts. From the unit-wise accounts produced by the assessee, it is observed that the assessee has allocated the expenses between both the units, but the entire R D Expenses has been claimed in Chopanki Dahej units for which deduction u/s. 8OIB of the I.T. Act is not available. Therefore, the assessee was asked to explain as to why the R D expenses should not be allocated to exempt units at Samba Udhampur on which deduction u/s.80IB of the I.T. Act has been claimed. 4. Assessee s submissions are reproduced as under :- With respect to R D Expenses of Rs.1,48,01,393/- claimed during the year, it is submitted that the same has been incurred and used for the products manufactured at Chopanki Dahej Units being established in the factory itself and the expenses are being incurred for the products manufactured there only. During the earlier assessment years, the Assessing Authority has proportionately disallowed the R D Expenses on the pretext that these expenses are to be apportioned between the Samba and Chopanki Units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deduction u/s.80IB of the I.T. Act allowable Rs.11,01,51,385/- The deduction u/s.80IB of the I.T. Act is allowed to the extent of Rs.11,01,51,385/- as against the deduction of Rs.11,16,97,684/- claimed in the return. Since the assessee has furnished inaccurate particulars of its income, I am satisfied that this is a fit case for initiating penalty proceedings within the meaning of section 271 (1) (c) of the I.T. Act, 1961. 6. Thereafter, AO noted that during the course of assessment proceedings, assessee company vide its letter dated 05.12.2014 filed a revised computation of income. That from the perusal of the revised computation, it is noticed that the assessee has claimed deduction of Rs.11,81,16,657/- on account of capital receipts. Consequently, the assessee has also reduced deduction u/s 80IB from Rs.11,18,97,684/- to Rs.7,83,92,030/-. That a revised Auditors Report on form No.10CCB has also been filed. That in the revised computation, the net taxable income has been declared at Rs.21,03,65,270/- as against Rs.29,51,76,280/- declared in the return of income filed on 29.09.2012. 7. AO was of the opinion that Hon ble Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r units respectively, treating as uncommon expenses and having no nexus with the exempt units . 4.4. In view of above facts, the contention as well as the revised computation filed by the assessee Company at assessment stage is not acceptable, being beyond statutory period allowed under the law for revising the Return of Income. The Hon'ble Supreme court in the case of Goetze India Ltd. 284 ITR (323) has held that the tax payer was not correct in amending original return by modifying the same at assessment stage without revising the return of income within permissible one as per law. Hence modified and revised claims of the assessee company w.r.t their deduction u/s 80-IB and allocation of common expenses between exempted and non-exempted units are not accepted and as such rejected. 8. Against the above order, assessee appealed before the ld. CIT(A). Ld. CIT (A) reproduced the submissions of the assessee. He decided the issue in favour of the assessee by noting as under :- 4. In the ground no. 1 2, the appellant has argued that they had filed a modified computation during the assessment proceedings, which should be accepted. The Assessing Officer has rejected the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Ponni Sugars Chemicals Ltd. (2008) 306 ITR 392 (SC); Shree Balaji Alloys vs. CIT (2011) 333 ITR 335 (J K); Vinod Kumar Jain vs. ITO, Jammu Special Bench, Amritsar (ITAT); CIT vs. Pruthvi Brokers Shareholders Pvt. Ltd. (Bom. HC). In these grounds of appeal the appellant has claimed excise duty refund as capital receipts instead of the revenue receipts considered to be so in original return of income. I agree with the argument of the appellant that the excise duty refund is a capital receipts and the deduction u/s 80IB would be modified accordingly. It will ultimately reduce the claim u/s 80IB by Rs 4,59,55,444/- as per the working submitted by the appellant. The modified claim certified by the CA was filed before the Assessing Officer also and due to this there is no loss to the revenue as such. In this regard the appellant has relied upon the various judgements cited in the submissions. In view of all this the AO is directed to treat the excise duty refund of Rs 11,81,16,657/- as capital receipt to be excluded from the income of the appellant. 6. Ground no. 5 6 - In these grounds the appellant has contended that in the return of income the allocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision, we direct that the revised claim is to be admitted and adjudicated upon by the AO. However, we note that in the assessment order framed qua deduction under section 80IB, AO only dealt with and allowed the claim and discussed on merits only that aspect of claim under section 80IB which were mentioned in the original claim. However, as regards the revised claim, the merits have not been gone into by the AO and he has rejected the claim as unadmitted. On the other hand, ld. CIT (A) has admitted the claim and decided the issue very laconically placing reliance upon several case laws. There is no discussion in the order of ld. CIT (A) as to who has examined the factual aspect of the case. He simply accepted the statement of the assessee and passed the same as his own order relying upon the case laws and proposition. 12. Even after, referring to the decision of the Hon ble Apex Court in the case of Liberty India (2009) 317 ITR 218(SC) which expounded that indirect expenses which do not have any direct nexus with the undertaking cannot be deducted in computing the profit of the undertaking. He went on to accept that the assessee has been able to establish the direct nexus b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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