PRINCIPAL COMMISSIONER OF INCOME TAX 4 vs. SYNPOL PRODUCTS PVT LTD

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

of Rs.30,87,259/­[80,19,695­ 49,32,336] u/s of 10B of the Income Tax Act? [B] Whether   the   Appellate   Tribunal   has substantially erred in law and on facts in deleting the disallowance of Rs.48,637/­ u/s C/TAXAP/526/2018 ORDER 14A of the the Income Tax Act, 1961? [C] Whether   the   Appellate   Tribunal   has substantially erred in law and on facts in deleting the disallowance of Rs.11,29,452/­ u/s 40(a)(ia) for non­deduction of TDS ?”

“3. Question­A pertains to disallowance of claim of exemption under section 10B of the Income Tax Act, 1961 ('the Act' for short), ordered   by   the   Assessing   Officer   on   the ground   that  the   assessee   had  inflated   the profit of the unit eligible for exemption, being   an   EOU   unit.     The  Commissioner   of Income

Tax

(Appeals) examined

the individual   heads   where   the   Assessing Officer   had   found   inflation   and   partially confirmed   the   Assessing   Officer's   finding while   giving   partial   relief   to   the assessee.     The   Tribunal  in   further   appeal by   the   assessee,   deleted   the   entire disallowance,   inter   alia,   observing   that the assessee had maintained separate books of   accounts   for   both   the   units;   eligible and   ineligible.     The   Assessing   Officer ought   to   have   pointed   out   a   particular expenditure incurred for earning income in the   EOU.   He   could   not   have   artificially apportioned   the   expenditure   merely   on   the basis   of   production   of   the   stakes.     The Tribunal   also   noted   that   in   the   earlier years, the accounting method adopted by the assessee was not disturbed by the Assessing Officer.