TaxTMI 
TaxTMI 
2014 (2) TMI 1421
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....e 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 of the case, the Appellant submits that the Assessing Officer be directed to recompute the deduction u/s 80IB/80I....
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....lution 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 submissions and also perused the relevant material available on record. It is observed that out of the total overheads of Rs.154.63 crores incurred by the assessee during the year under considerat....
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....cepted 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 the nature of selling expenses and the allocation made by the assessee of the said expenses on the basis of turnover was quite reasonable. The allocation so made by the assessee also cannot ....
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....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 80IB/80IC of the Act by reallocating the common indirect expenses and allow ground No. 1 & 2 of the assessee's appeal". and deleted the addition as made by the revenue authorities. 5. In so far as ....
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....arantee 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 the A.O. to recompute the commission for guarantee given by the assessee to its Associated Enterprises @ 0.5% being the arm's length price. Ground No. 1 of Revenue's appeal is thus partly allowed whereas ground No....