Successful appeal restores Section 80IC deduction, reallocates expenses, and considers pandemic impact.

The appellant successfully appealed against the restriction imposed on its Section 80IC deduction claim for the assessment year 2012-13. The deduction amount was restored, and an office expenditure reallocation was made across the three units. The recalculated allocation percentages for administrative expenses were upheld, dismissing arguments of disproportionate expenses in one unit. The tribunal directed the deletion of the disallowed amount based on revenue generation concerns. The judgment considered the impact of the COVID-19 pandemic on the delay in pronouncing the order, ultimately allowing the appeal.

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Issues:
1. Appeal against order restricting Section 80IC deduction claim.
2. Allocation of office expenditure among three units.
3. Disallowance of expenses based on revenue generation.
4. Exclusion of time period due to COVID-19 pandemic.

Analysis:
1. The appellant's appeal for the assessment year 2012-13 challenges the restriction imposed by the lower authorities on its Section 80IC deduction claim. The deduction was reduced from Rs. 27,24,02,458 to Rs. 27,16,80,866, with an office expenditure reallocation of Rs. 7,21,592 across the three units.

2. The appellant, engaged in manufacturing industrial tractors, automobile gears, and shafts across units in Rudrapur, Faridabad, and Kolkata, had allocated administrative expenses of Rs. 7,80,012, Rs. 46,80,075, and Rs. 23,40,037, respectively. The Assessing Officer recalculated the allocation percentages to 8.95%, 53.7%, and 37.34% for the units, a decision upheld by the CIT(A).

3. The Departmental Representative argued that the Rudrapur unit's expenses were disproportionately high compared to its revenue generation. However, the tribunal found no merit in this argument, citing a previous assessment year's order that disallowed expenses without rejecting the appellant's books of account. As the books were not rejected in the current year, the tribunal directed the Assessing Officer to delete the disallowed amount of Rs. 7,21,592.

4. The judgment acknowledged the delay in pronouncing the order but excluded the time period due to the COVID-19 pandemic, following a precedent set by the Mumbai Tribunal in a similar case. Consequently, the appellant's appeal was allowed, and the order was pronounced on 29.06.2020.

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