TaxTMI 
TaxTMI 
2014 (2) TMI 1421
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....-2006 1. The Learned Commissioner of Income Tax (Appeals) erred in holding that the assessee has claimed excess deduction u/s 80IB/80IC of the Act. 2. The Learned Commissioner of Income Tax (Appeals) erred in disregarding the method of allocation consistently adopted by the Appellant and in re-allocating 50% of the following overheads of the non-eligible undertakings to the eligible undertakings of the Appellant, while computing the deduction u/s 80IB/80IC of the Act. • Miscellaneous Expenses • Conveyance and Travelling Expenses • Rent, Rates and Taxes • Advertisement and Publicity • Schemes of Promotions Having regard to the facts and circumstances ....
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....d Dispute Resolution Panel erred in holding that the assessee has claimed excess deduction u/s 80IB/80IC of the Act. 2. The learned Dispute Resolution Panel erred in disregarding the method of allocation consistently adopted by the appellant and in re-allocating 50% of the following overheads of the non-eligible undertakings to the eligible undertakings of the appellant, while computing the deduction u/s 80IB/80IC of the Act:- - Miscellaneous Expenses - Conveyance and Traveling Expenses - Rent, Rates and Taxes - Advertisement and publicity - Schemes and promotions" 4. He, therefore, submitted that the coordinate Bench, decided the issue, "8. We have considered the rival submi....
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....any as a part of trading activity under the same brand name and the benefit of the said expenditure thus was available equally to the trading segment. Incidentally, the A.O. also impliedly accepted this position while observing in his order that such expenses on advertisement & publicity and schemes have to be allocated to some extent to the non-eligible segment. He, however, held that such allocation could not be very large amount and accordingly re-allocated 50% of the said expenses to eligible unit on adhoc basis. In our opinion, such reallocation made by the A.O. on adhoc basis cannot be sustained having regard to all the facts of the case including especially the fact that the expenditure on advertisement & publicity and schemes was in....
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....t will have to be adopted and that adoption of the method of apportioning on the basis of gross receipts could not be said to be a perverse method to apply. Keeping in view the decision of Hon'ble Supreme Court in the case of Consolidated Coffee Ltd. v. State of Karnataka (supra) and having regard to the facts of the case, we are of the view that the allocation of expenses made by the assessee between eligible business and non-eligible business for the purpose of computing deduction u/s 80IB/80IC of the Act was reasonable and there was no justifiable reason for the A.O. to disturb the same and make re-allocation on adhoc basis. We, therefore, delete the addition made by the A.O. by restricting the claim of the assessee for deduction u/s 80I....
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....accepting the CUP method as the most appropriate method for benchmarking the guarantee fee, the Tribunal accepted 0.5% guarantee fee/commission to be at arm's length after taking into consideration the rates of guarantee commission charged by various banks including the guarantee commission charged by the HSBC Bank in the range of 0.15% to 3%. Since the facts involved in the present case are materially similar to the facts involved in the case of Everest Kanto Cylinder Ltd. (supra), we prefer to follow the decision rendered by the co-ordinate Bench of this Tribunal in the said case over the decision of French Court in the case of Societe Carrefour (supra). We, accordingly modify the impugned order of the ld. CIT(A) on this issue and direct ....