TaxTMI 
TaxTMI 
2015 (5) TMI 1005
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.... Act has apportioned interest expense of Rs. 1,69,25,345/- between eligible 80-IB(10) projects and non-eligible 80-IB(10) projects and reduced the profits from eligible projects and consequently recomputed deduction under section 80-IB(10) of the Act. 3. The CIT(A) rejected the ground of apportionment of entire interest towards non-eligible 80-IB(10) projects on the ground that the fund flow position for assessment year 2007-08 as per closing WIP indicates that there was deficit in both categories of projects. He further noted that the business of the assessee is composite and borrowed funds are used as working capital for execution of various construction projects. Such interest expenditure is treated as period cost and debited to the common profit & loss account and not as direct cost of a particular project. He further noted that the loans were availed and utilized for all the projects and there was no one to one linkage between borrowed funds and their deployment in non-eligible 80-IB(10) projects. He submitted that during the course of hearing before the Tribunal, the assessee had submitted a note detailing out the manner of the preparation and maintenance of its books of acc....
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....e surplus and deficit was worked out. It was further submitted that the accounts have been audited by the Tax Auditor as well as audit reports submitted for grant of deduction under section 80-IB(10) of the Act and the Assessing Officer has not raised objection regarding correctness and completeness of accounts. Further, it is not correct before the Tribunal to hold that the onus is entirely on the assessee to demonstrate the actual utilization of interest bearing funds which the assessee admits that utilization of project-wise borrowed funds and interest cannot be identified from the examination of common bank accounts. The Ld. Counsel for the assessee further submitted that various decisions were cited before the Tribunal at the time of hearing, however, these are not considered. Therefore, non-consideration of the decisions cited before the Tribunal constitutes a mistake apparent from record within the meaning of section 254(2) of the Act. He accordingly submitted that the order of the Tribunal should be re-called and the issue be decided afresh in the light of the correct factual and legal position. 5. The Ld. Departmental Representative for the Revenue, on the other hand, str....
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....nds were not utilized for 80IB (10) projects and therefore, there cannot be any apportionment of interest expenditure to 80IB(10) projects, is not tenable. When the business of execution of projects carried out by the appellant is composite and when the appellant is not able establish the nexus or one-to-one linkage between the borrowed funds and their utilization in the non 80IB(10)projects, the finance cost is required to be apportioned among all the projects." 8. After holding that the interest expenditure was required to be apportioned among all the projects, the CIT(A) considered the next grievance of the assessee whereby the basis of apportionment adopted by the Assessing Officer was sought to be assailed. The Assessing Officer had apportioned the interest expenditure in the ratio of profits of 80IB(10) projects and non 80IB(10) projects. The CIT(A) accepted the plea of the assessee that the Assessing Officer was wrong in this regard and he upheld the method of apportionment canvassed by the assessee which was on the basis of the ratio of total work-in-progress of such progress. In para 7.2.1 of his order the CIT(A) has tabulated the apportionment of interest on the basis of....
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.... bearing funds for such projects would only be for the shortfall, if any. The learned counsel submitted that assessee would satisfied if the directions of the CIT(A) are modify to that extent requiring the Assessing Officer to consider the availability of such advances while considering allocation of interest incurred on common borrowings. 10. On the other hand, the learned Departmental Representative has relied upon the orders of the authorities below in support of the case of the Revenue. 11. Having considered the rival positions and it is apparent that the stand of the assessee is that 80IB(10) projects have surplus by way of advances from customers and that there was no necessity of allocating any interest expenditure on such projects because the interest-bearing funds were not utilized for the same. The aforesaid contention of the assessee has not been accepted by the CIT(A). In para 7.1.1 of his order the CIT(A) has noticed that assessee's assertions that for the assessmet year 2006-07 there was a surplus in 80IB(10) projects considering the receipts from customers and the additions to the work-in-progress made, so however, he noted that for the assessment year 2007-08 the ....
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....nder these circumstances, we find the Tribunal upheld the order of the Ld. CIT(A) and therefore, in our opinion, there is no apparent mistake in the order of the Tribunal so as to rectify the same within the meaning of section 254(2) of the Act. The assessee through this Miscellaneous Application wants the Tribunal to modify its own order which amounts to review of its own order by the Tribunal which is not permissible in the law. In this view of the matter, the Miscellaneous Application filed by the assessee is devoid of any merit and therefore, is dismissed. MA No.76/PN/2014 : 8. The assessee through this Miscellaneous Application requests the Tribunal to re-call the order of the Tribunal and pass appropriate orders. 9. The first issue raised by the assessee in this Miscellaneous Application is regarding the allocation of interest while working out eligible profits for deduction under section 80-IB(10) of the Act. 10. After hearing both the sides, we find the above issue raised by the assessee in this Miscellaneous Application is identical to the issue in MA No.75/PN/2014 which we have already decided in the preceding paragraphs and the Miscellaneous Application filed by the ....