2017 (4) TMI 821

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....he case, the Ld. CIT(A) has erred in directing not to reduce Rs. 24,53,532/- from the deduction u/s. 80IC of the Act, on account of freight charges. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in directing not to make adjustment of Rs. 16,64,268/- on account of interest expense for working out deduction u/s. 80IC of the Act. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in directing not to make adjustment in respect of interest on loan @12% for working out deduction u/s. 80IC of the Act. 4. On the facts and circumstances of the case, the Ld. CIT(A) has erred in modifying the amount of Rs. 9,15,140/- to Rs. 5,00,000/- on account of un-proportioned expenses for working out deduction ....

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.... the assessee company has claimed deduction u/s. 80IC at Rs. 1,15,71,789/-. Various details and documents with regard to income shown and expenses and deduction claimed, were called for and filed. Thereafter, the AO vide Order dated 28.12.2011 passed u/s. 143(3) of the I.T. Act,1961 and assessed the income at Rs. 1,76,62,052/-. 5. Against the said order of the AO, assessee appealed before the Ld. CIT(A), who vide impugned his Order dated 03.1.2014 has partly allowed the appeal of the assessee. 6. Aggrieved with the aforesaid order of the Ld. CIT(A), Revenue is in appeal and Assessee is in Cross Objection before the Tribunal 7. Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal and stated....

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....r production business of the appellant. The interest income may be treated as part of business profits. The amount of Rs. 17,46,414/- should be added to the total income. 11.3. The third adjustment was on account of interest expense of Rs. 16,64,268/-. The AO made the adjustment stating no interest has. been shown in Baddi. The appellant stated that funds on which interest was paid was utilized for Faridabad unit. I find merit in the contentions of the appellant. The AO has worked out the interest expenses on a presumptive basis which is not correct. The amount of Rs. 16,64,268/- is not to be reduced from the profits and not to be added to the total income. 11.4. The fourth adjustment is also on account of presumptive interest expense o....

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....m the total deduction claimed and not to be added to the total income, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and accordingly dismiss the ground no. 1 raised by the Revenue. 9.2. With regard to ground no. 2 raised in the Revenue's Appeal on account of interest expense of Rs. 16,64,268/- is concerned, we find that the AO made the adjustment stating no interest has been shown in Baddi. The assessee stated that funds on which interest was paid was utilized for Faridabad unit. Hence, Ld. CIT(A) found the merit in the contentions of the assessee. The AO has worked out the interest expenses on a presumptive basis which is not correct. Thus, the Ld. CIT(A) has rightl....