Income Tax Appellate Tribunal - Ahmedabad
Decisiondraft Analytics Ltd.,, ... vs Assessee on 21 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD
"D" BENCH
Before: Shri A.K. Garodia, Accountant Member and
Shri Kul Bharat, Judicial Member
I.T.A. No.713/Ahd/2012
A. Y. 2007-08
Decisioncraft Analytics Ltd. (Now Commissioner of
merged with Aud ience Measurement Income Tax (OSD)
and Analytics Pvt. Ltd.) V. Rangi-1
601, Shap ath-II, S.G. Highway, Opp. Ahmed ab ad
Rajp ath Club , Ahmed ab ad
PAN-AABCC5157E
Appellant Respondent
Department by : Shri B.L. Yadav, Sr. D.R.
Assessee by : Shri Krutesh Patel, A.R.
Date of hearing : 21.05.2012
Date of pronouncement 22.06.2012
आदे श/ORDER
PER : A.K. Garodia, Accountant Member
This is assessee's appeal directed against the order of Ld. CIT(A)-6, Ahmedabad dated 17.01.2012 for the assessment year 2007-08.
2. The assessee has raised various grounds as per ground No.1.1 to 1.8 but in course of hearing before us, Ld. A.R. of the assessee has pressed only ground No.1.7. The remaining grounds are rejected as not pressed. Ground No.1.7 is reproduced as under:-
I.T.A. No.713/Ahd/2012 2
A. Y. 2007-08 "The assessing officer has apportioned the total depreciation of the assessee between the two units based on sales turn over. The assessee has constantly allocated depreciation based on total investment in fixed assets in each unit. The same apportionment has been accepted by the department since many years in past and even in the subsequent assessment year. The Assessing Officer or Ld. CIT(A) has not produced any finding as to the fact that the assessee has used assets located in export oriented units for the purpose of domestic business. The conclusions, they have reached are merely based on assumptions and presumptions, without sufficient facts to support them."
3. Brief facts of the case are that it is noted by the A.O. in para No.6 of the assessment order that the assessee is doing export and domestic business from the same undertaking and expenses which are directly related to the export business have been allocated directly but where such direct link is not possible, the expenses have been bifurcated on the basis of turn over but while claiming depreciation as per I.T., the allocation of expenses was not done according to turn over and more has been debited against domestic profit and less has been debited against export profits. The A.O. issued show cause notice on this issue as to why the depreciation should not be allocated on the basis of turnover. Reply was furnished by the assessee but the A.O. was not satisfied and he allocated the depreciation also on turn over basis and in this manner, the profit of 10A units was decreased from Rs.1,62,26,813/- to Rs.1,29,94,351/- and accordingly, deduction u/s 10A was allowed less. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) but without success and now the assessee is in appeal before us.
4. It was submitted by the A.R. of the assessee before us that depreciation was allocated on the basis of investment in both units because it is I.T.A. No.713/Ahd/2012 3 A. Y. 2007-08 the submission that the assets are not used commonly by both units. He has also submitted that the matter may be restored back to the file of the A.O. On the other hand, Ld. D.R. supported the order of Ld. CIT(A).
5. We have considered the rival submissions and perused the record and gone through the order of the authorities below. Considering the facts of the present case, we are of the considered opinion that if the same asset was used for both purposes of domestic business and for export business, depreciation has to be allocated on turn over basis but if separate assets are used for domestic business and other assets are used for export business exclusively, then depreciation can be charged to both units on the basis of such assets used for specific business. Facts on this aspect are not available on record and hence, we feel it proper that this matter should go back to the file of the A.O. for fresh decision. We, therefore, set aside the order of Ld. CIT(A) on this issue and restore the matter back to the file of the A.O. for fresh decision. We want to make it clear that the burden is on the assessee to establish that the assets are not commonly used for both the units and the assessee has to establish with evidence as to which assets are used for domestic business unit and 10A unit and which assets are used commonly and if the assessee is able to do so, the allocation of depreciation can be made on the basis of such exclusive user for respective units but in respect of those assets which are used commonly by both units, allocation of depreciation has to be made on the ratio of turn over of both units. The A.O. should pass necessary order as per law, as per above discussion after providing adequate opportunity of being heard to the assessee. I.T.A. No.713/Ahd/2012 4 A. Y. 2007-08
6. In the result, the appeal of the assessee stands allowed for statistical purpose.
Order pronounced in open Court on 22.06.2012
Sd/- Sd/-
(Kul Bharat) (A.K. Garodia)
Judicial Member Accountant Member
True copy
N.K. Chaudhary, Sr. P.S.
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
1. अपीलाथȸ / Appellant
2. ू×यथȸ / Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ- अपील / CIT (A)
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।