TaxTMI 
TaxTMI 
2015 (6) TMI 832
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....the utilization of loan amount among various units for the purpose of direction under section 80IA of the Income Tax Act, 1961. 2. The brief facts of the case are that the AO completed the original assessment on 18.03.2005 determining total taxable income at Rs. 1,89,80,941/-. In the original assessment order, the Assessing Officer noticed from the consolidated financial statement that profit of the all the five units taken together was shown by assessee at Rs. 2,87,53,475/- on the total sale and job work amounting to Rs. 52,88,33,942/- giving a net profit of 5.4%. He also noted that total sale and job work of unit three was shown at Rs. 13,24,07,383/- and profit declared was at Rs. 1,23,71,140/- giving net profit of Rs. 9.34%. As the net ....
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.... contention of the assessee and held at page 2 to 3 of his order, which is reproduced as under:- "I have gone through certificate issued by the assessee and assessment record for A.Y. 2002-03 and unable to accept the contention of assessee. The certificate produced by the assessee only reflects the purpose for which loan was issued to Unit-III. However, the assessee could not discharge its onus either at the time of original assessment proceedings or during set aside proceedings that the amount so sanctioned by the bank was utilised for Unit-Ill wholly and exclusively. Since, the provisions related to deductions and exemptions are to be construed strictly and onus lies on assessee to substantiate the genuineness and correctness of de....
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.... aforesaid and the order dated 31.1.2007 passed by the Ld. CIT(A) on the same issue in the assessee's own case for the asstt. year 2003-04. He further stated that Ld. CIT(A) has not followed the order of the ITAT in assessee's own case for the asstt. year 2004-05 (against which the Revenue has not filed any appeal before the High Court) which was brought to the notice of the Ld. CIT(A) at the time of appellate proceedings. Assessee has also brought to the notice of the Ld. CIT(A), the order of his predecessor dated 31.1.2007 for the asstt. year 2003-04 on the same issue which has been decided in favor of the assessee (against which the Revenue has not filed any appeal before the Tribunal). He requested that the issue of allocation of intere....
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....having four industrial units located at different sites. Unit-'-III situated at Faridabad was eligible for claim of deduction u/s 80IB. While computing eligible profit for claim of deduction u/s 80IB, the AO reduced the profit by amount of financial charges of RS.ll.43 lakhs, scrap sale and job work receipt of Rs. 33.64 lakhs. As per AO, the assessee had shown financial charges in Unit-Ill only of Rs. 20.26 lakhs which included interest on other loans of RS.I0.36 lakhs and discounting and bank charges at Rs. 9.90 lakhs. Total financial charges claimed by the assessee was to the tune of Rs. 1,53,16,997/-which includes interest on term loan of Rs. 5,62,847/-, interest on other loans of Rs. 95,26,591/- and discounting and bank charges at R....
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....herefore, the AO had reduced the profit of Unit Ill, by Rs. 11,43,607/- (Rs. 21,79,684/- - Rs. 10,36,077) and considered the same for computation of deduction u/s. 80IB and accordingly, the deduction was reduced by this amount. 5. From the record, we found that assessee was maintaining separate books of account for each unit and same have been produced before the AO. The interest paid in respect of Unit IV which was engaged in the manufacturing of gears, was taken only for the purpose of Unit IV, there was no reason for spreading over the interest expenditure of unit IV which is a separate unit over the other units on the basis of sales. We found that unit IV was sanctioned bank loan separately which was utilized for unit IV only. In respe....
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....mount of interest and financial charges of Unit IV, the assessee filed appeal before CIT(A) who allowed the same in favour of the assessee and the Revenue did not go in further appeal before the Tribunal. 6. In view of the above discussion, we do not find any infirmity in the order of CIT(A) for directing the AO not to reduce interest and financial charges of Unit IV, from the eligible profit of unit III while computing deduction u/s 80IB." 7. Similarly, the Ld. CIT(A) has also passed the order dated 31.1.2007 in assessee's own case for the asstt. year 2003-04 adjudicated and decided the issue in dispute in favor of the assessee. We fail to understand why the Ld. CIT(A) in impugned order has not followed the ITAT direction given in order ....