2024 (1) TMI 214

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....tion of general corporate expenses amounting to INR 1,13,26,557 to STPI and Non STPI unit even though separate books were maintained for all the units. 2 The Ld. CIT(A) failed to comprehend that Appellant has already allocated the expenses following Scientific & Accounting Principles and Policies to its each separate and Independent Units. 3 The Ld. CIT(A) has grossly failed in understanding that reallocation done by Ld. AO is ultimately amounting to double allocation of expenses to STPI and non STPI unit. 4 The Ld. CIT(A) erred in confirming the order of Ld. AO without having regard to the fact that Appellant has followed the principle of consistency for expenses allocations in lines with earlier years. ....

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....eas the Hon'ble ITAT in ITA No. 1588/M/2011 dated 14.09.2016 has granted partial relief and on the disputed issue of allocation of common expenses between STPI and non STPI units, the ITAT has restored the issue to the file of the Assessing officer to examine afresh and decide in accordance with law. 3. Whereas, the Assessing Officer (AO) has issued notice u/sec 142(1) of the Act dated 28.08.2017, in compliance to the notice, the Ld. AR of the assessee has appeared from time to time and submitted the details. On the issue of allocation of the expenses, the assessee was called upon to explain the basis of allocation/scientific basis. The assessee has submitted the details vide letter dated 17.11.2017 & 7-12-2017 along with the annexure. T....

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.... 337 Administrative expenditure 6717905 Administrative expenditure 95:5 6382009 335895 Selling and distributing 1001903 Selling and distributing 92:8 921750 80152 Direct remuneration 3600000 Administrative expenditure 95:5 3420000 180000         10730172 596385 8. Deduction under Section 10A of the Act In view of the discussion in the forgoing paras the deduction under section 10A is determined as under: Sr. No Particular Rs. Rs. 1 Profit   66,26,15,180 Less Corporate Expenditure (including domestic and STP) 1,07,30,172   2 Deduction u/s 10A       &nbs....

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....DR supported the order of the CIT(A). 6. Heard the rival submissions and perused the material on record. The sole disputed issue envisaged by the Ld. AR that the CIT(A) has erred in confirming the action of assessing officer without considering the basis of allocation of general corporate expenses between the STPI and non STPI units and the assessee has maintained separate books of accounts. Further the assessee has allocated the expenses following the scientific principles and policies between STPI and non STPI units. Whereas reallocation of expenses by the assessing officer is without any basis or methodology. The Ld. AR further emphasized that the AO in the assessment proceedings has not considered the consistency of expenses allocati....