TaxTMI 
TaxTMI 
2025 (6) TMI 226
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....made u/s. 10AA for Rs. 46,23,150/-. The relevant grounds reads as under:- "1.1 On the facts and circumstances of the case and in Law, the Additional/Joint Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Bhubaneswar, erred in confirming the reduction of exemption claimed U/sec 10AA by Rs. 46,23,130/- ignoring the fact that the Assessing Officer erred in calculating the exemption amount U/sec 10AA based on original ratio as against the revised ratio after adjustment to profit of the SEZ unit. 1.2 The said C.I.T.(Appeals) erred in confirming and not reducing direct expenses of Rs. 34,15,260/- being cost of sales allocable to sales of Rs. 42,83,756/-being sales to other units and common expenses o....
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..../- on sales to other SEZ units Rs. 42,83,757/- which is derived after adjustment of cost of sales incurred on said sales which is derived at net margin of the SEZ unit @ 20.27% of said sales of Rs. 42,83,757/-. ii. Allocation of common expenditure to SEZ Unit at the revised ratio of 24.85 % as against the original ratio of 26.10%. 5. The ld. AO on verification from the details furnished noted that following sales of SEZ cannot be included for the purpose of determination and deduction u/s. 10A which were made to the Indian concerns as it is not part of export turnover:- Sr. No. Name of the customer Amount in Rs. 1. Bholenath Metal 23,756 2. EOS Power India Ltd. 5,80,000 3. Wabco India Ltd. 36,....
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....ils, it is found that assessee allocated various expenses to SEZ unit on turnover basis i.e. 26.10%. On further verification, it was found that assessee did not allocate certain expenses to SEZ unit. In view of this, vide notice dated 30.11.2017, assessee was asked to explain the same. In reply to this, assessee vide letter dated 08.12.2017 submitted the details of expenses which were not allocated to SEZ unit. On verification of the same, It is found that under the head Legal & Professional expenses, assessee has debited Rs. 9,50,000/- as monthly software subscription paid to Ramco Systems Ltd. During the assessment proceedings, the assessee has stated that these expenses are incurred for Monthly Software Subscription for ERP software. The....
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....AO and First Appellate Authority have erred in not reducing the corresponding cost of sales incurred on sales to other SEZ units i.e. Rs. 34,15,260/- which is derived at cost of sales of the SEZ unit @ 79.73% (100%-net margin @ 20.27% of SEZ unit) of said sales of Rs. 42,83,757/-. He submitted that even if AO's reasoning is accepted, nut both AO has erred in not appreciating the fact that there is a corresponding cost incurred towards goods sold to other SEZ units and therefore only net margin of Rs. 8,68,497/- should have been reduced from profit of the SEZ unit. Thus, after reduction of sales to other SEZ units, the revised ratio of SEZ Turnover /Total Turnover will be reduced to 24.85% as against 26.1% and therefore, allocation of common....
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....,245 7,24,245 5. Total Income (3+4) 8,98,38,134 8,98,38,134 8,55,54,378 6. TOTAL EXPENDITURE AS PER P&L A/C 4,99,24,498 4,99,24,498 4,99,24,498 7. SEZ EXCLUSIVE EXPENSES 1,12,55,457 1,12,55,457 1,12,55,457 8. SHARE OF COMMON EXPENDITURE 1,11,25,886 1,11,25,886 1,05,91,058 9. (5-6-7-8) 1,75,32,293 1,75,32,293 1,37,83,365 10. ADD: DEPRECIATION AS PER BOOK 34,30,791 34,30,791 34,30,791 11. LESS: DEPRECIATION U/S 32 (52,95,494) (52,95,494) (52,95,494) 12. ADJUSTED PROFIT OF SEZ UNIT (9+10-11) 1,56,67,590 1,56,67,590 1,19,18,662 ADJUSTMENTS MADE BY AO 13. LESS: SALE TO OTHERS ....