TaxTMI 
TaxTMI 
2015 (10) TMI 1003
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....hetic, Organic Reactive Dyes and Chemicals. Assessee electronically filed its return of income for A.Y. 2008- 09 on 14.09.2008 declaring total income at Rs. 7,65,410/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 30.12.2010 and the total income was determined at Rs. 1,39,00,220/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 04.10.2010 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds:- 1. The Ld. Commissioner of Income tax (A) has erred in law and on facts in directing the Assessing Officer to delete th....
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....ich was a taxable unit, has come down to 7.57% from 10.66% and on the other hand the gross profit of Unit-II (EOU) had jumped to 49.83% as against 41.65% in the preceding year. The A.O therefore asked the Assessee to explain the reasons for variations in the gross profit ratios. The submissions of the Assessee were not found acceptable to the A.O. He noticed that number of expenses under the head "manufacturing and administrative" were appearing only in Unit-I and not in Unit-II and the expenses for wages and salaries have increased in Unit-I but decreased in Unit-II though the process of manufacturing according to him was almost similar in both the units. He therefore concluded that there was no apparent reason for a decline in gross profi....
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....f raw materials, labour charges and wages, electricity consumption, manufacturing, administrative and financial expenses. Full details of all the expenses were available which have been verified and audited by the auditors of the appellant. Labour and staff pertaining to respective units were distinctly allocated and hence there was no question of any allocation of these expenses. The appellant, therefore, submitted that actual expenses pertaining to Unit - 1 & Unit - II were debited to the accounts of that unit respectively. During the course of appellate proceedings, the appellant has also given a chart reflecting all the items in the P & L Account and the amount of expenditure incurred in both the units indicating the basis on which t....
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....e following expenses are not accepted. The expenditure should ideally be distributed on the basis of turnover of both the units as this expenditure pertains to both the units. The A. O. is, therefore, directed to apportion the above mentioned expenses in ratio of the turnover of both the units. Regarding the other expenses, as has been held above, the reallocation done by the A.O is directed to be deleted. The grounds of appeal are, therefore, partly allowed. 7. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 8. Before us, ld. D.R. pointed to the various findings of A.O and supported his order. Ld. A.R. on the other hand reiterated the submissions made before A.O and ld. CIT(A) and further submitted....