GODREJ CONSUMER PRODUCTS LIMITED, MUMBAI V. D.C.I.T.10(2), MUMBAI

MA 137/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7416 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 01-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A Y CHALLENGING IMPUGN ED OF L
• Assessee Lawyers: ANOTHER
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER MA NO.137/MUM/2011 (ARISING OUT OF ITA NO.6323/M/2008 FOR A.Y. 2005-06 ) GODREJ CONSUMER PRODUCTS LTD., PIROJESHANAGAR, EASTERN EXPRESS HIGHWAY, VIKHROLI, MUMBAI -400 079 ....... APPLICANT VS DCIT, RANGE -10(2), MUMBAI ..... RESPONDENT PAN: AABCG 3365 J APPLICANT BY: SHRI FALEE H. BILIMORIA RESPONDENT BY: SHRI PARTHASARATHI NAIK DATE OF HEARING: 05.08.2011 DATE OF PRONOUNCEMENT: 19.08.2011 O R D E R PER R.S. PADVEKAR, JM: THE ASSESSEE HAS FILED THIS MISC. APPLICATION U/S.2 54(2) STATING THAT THERE IS A MISTAKE APPARENT ON THE FACE OF REC ORD IN THE ORDER PASSED IN ITA NO.6323/MUM/2008 DATED 30.11.2010. 2. THERE WERE TWO APPEALS, ONE BY THE ASSESSEE AND ANOTHER BY THE REVENUE FOR THE A.Y. 2005-06 CHALLENGING THE IMPUGN ED ORDER OF THE LD. CIT (A) MUMBAI DATED 14.8.2008. WHILE REPRODUC ING THE OPERATIVE PART OF THE TRIBUNAL ORDER FOR THE A.Y. 2004-05, BY MISTAKE THE PARAGRAPHS RELEVANT TO THE ASSESSEES APPEAL WERE R EPRODUCED. MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 2 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . WE FIND THAT THERE IS A MISTAKE IN PARA NO.8 IN THE ORDER. THE TRIBUNAL DISMISSED THE REVENUES APPEAL, AS STATED ABOVE BUT WHILE REP RODUCING THE OPERATIVE PART OF THE ASSESSEES APPEAL FOR THE A.Y . 2004-05, THERE IS A MISTAKE. THE CORRECT OPERATIVE PART IN ITA NO.4753 /MUM/2007 DATED 13.08.2010 IS AS UNDER:- 8. THE OBSERVATION OF THE AO THAT THE BADDI UNIT I S NOT LIABLE FOR LEVY OF EXCISE DUTY IS FACTUALLY INCORRECT. IN FACT THE GAUHATI UNIT OF THE ASSESSEE COMPANY IS ALSO LIABLE FOR EXC ISE DUTY. THE AO WAS ALSO IN ERROR IN OBSERVING THAT THERE IS A D IFFERENCE IN RECORDING EXCISE DUTY LIABILITY BETWEEN SILVASSA UN IT AND THE GAUHATI UNIT. THE ASSESSEE HAS DEMONSTRATED THAT T HE METHOD OF ACCOUNTING OF EXCISE DUTY OF ALL THE UNITS OF THE A SSESSEE COMPANY IS THE SAME. THE ACCOUNTING OF SALARIES AND WAGES, RENT, INSURANCE, RATES AND TAXES, FREIGHT CHARGES, COMMIS SION AND DISCOUNT, SELLING AND DISTRIBUTION EXPENSES AS WELL AS GENERAL EXPENSES, IN ADDITION TO INTEREST AND FINANCIAL CHA RGES HAVE BEEN EXPLAINED IN DETAIL BY THE ASSESSEE AND HAVE BEEN R EPRODUCED FROM PAGES 5 TO 10 OF THE CIT(APPEALS) ORDER. AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT(APPEALS) AT PAGE 17 PARA 11 HAS OBSERVED AS FOLLOWS : 11. I HAVE CAREFULLY CONSIDERED THE FINDINGS OF TH E AO AND THE SUBMISSIONS OF THE APPELLANT AND THE MATERIAL ON RE CORD. BASED ON THE SUBMISSIONS IN THE FOREGOING PARAGRAPHS, I F IND HAT THE FOLLOWING FACTS CLEARLY SUPPORT THE METHOD ADOPTED BY THE APPELLANT FOR ALLOCATING SELLING AND DISTRIBUTION E XPENSES AND CORPORATE ADMINISTRATIVE EXPENSES INCURRED AT THE H EAD OFFICE ON THE BASIS OF SALES OR ON THE BASIS OF THE ACTIVITY PERFORMED, AS AGAINST THE METHOD OF ALLOCATING SUCH EXPENSES ON T HE BASIS OF NET PROFITS OF THE UNITS, AS ADOPTED BY THE AO; A) THE APPELLANT COMPANY IS A MANUFACTURER OF FAST MOVING CONSUMER PRODUCTS AND IS FACED WITH SEVERE COMPETIT ION IN THE MARKET WITH VARIOUS MANUFACTURERS SELLING COMPETING GOODS. THE SELLING & DISTRIBUTION FUNCTION IS, THEREFORE, AN E XTREMELY CRITICAL FUNCTION, WHICH IS DIRECTLY CONTROLLED FROM THE HEA D OFFICE, FOR SUSTAINING AND INCREASING THE SALE OF PRODUCTS MANU FACTURED BY THE COMPANY. THE MAIN FUNCTIONS CARRIED OUT AT THE HEAD OFFICE ARE, THEREFORE, THE SELLING AND DISTRIBUTION FUNCTI ON AND THE CORPORATE ADMINISTRATION FUNCTION. B) THE APPELLANT MAINTAINS SEPARATE UNIT-WISE ACCOU NTS AND HAS ACCOUNTED FOR ALL THE DIRECT MANUFACTURING COST S, STAFF COSTS AND OTHER DIRECT AND INDIRECT COSTS INCURRED AT A P ARTICULAR MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 3 MANUFACTURING UNIT, ON ACTUAL BASIS AT THE VARIOUS UNITS AND HAS DEBITED SUCH EXPENDITURE DIRECTLY TO THE RESPECTIVE UNITS. THE UNIT- WISE PROFIT AND LOSS ACCOUNT PLACED BEFORE ME DULY CONFIRMS THIS FACT. C) ONLY SELLING & DISTRIBUTION EXPENSES AND ADMINIS TRATIVE EXPENSES, WHICH ARE IN THE NATURE OF INDIRECT COSTS , HAVE BEEN INCURRED AT THE HEAD OFFICE AND HAVE BEEN ALLOCATED TO THE VARIOUS MANUFACTURING UNITS ON THE BASIS OF SALES OR ON THE BASIS OF THE ACTIVITY PERFORMED. ONCE AGAIN, THE UNIT-WISE PROFI T AND LOSS ACCOUNT PLACED BEFORE ME DULY CONFIRMS THIS FACT. D) THE APPELLANT HAS ALLOCATED THE EXPENDITURE IN R ESPECT OF THE COMMON SERVICES PROVIDED BY THE SELLING AND DIS TRIBUTION DEPARTMENT AND THE CORPORATE DEPARTMENT IN A SCIENT IFIC MANNER TO THE MANUFACTURING UNITS. THIS TREATMENT OF ALLOC ATING THE COMMON COSTS OF SUCH SERVICES TO THE MANUFACTURING/ PRODUCTION UNITS IS IN ACCORDANCE WITH THE PRINCIPLES ENUNCIAT ED BY JCMA, LONDON. E) THE CERTIFICATE ISSUED BY THE COST AUDITOR OF TH E APPELLANT, WHICH HAS BEEN PLACED ON RECORD, DULY CONFIRMS THAT (A) THE MAIN ACTIVITY CARRIED OUT AT THE CORPORATE OFFICE INCLUD ES THE MARKETING AND DISTRIBUTION ACTIVITIES AS ALSO GENERAL ADMINIS TRATION ACTIVITIES FOR THE COMPANY AS A WHOLE (B) ALL UNIT SPECIFIC EX PENDITURE IS INCURRED AT THE RESPECTIVE UNITS AND NO DIRECT COST S OF THE MANUFACTURING UNITS ARE INCLUDED AT THE CORPORATE O FFICE LEVEL (C) SINCE ALL COSTS INCURRED AT THE CORPORATE OFFICE AR E MAINLY IN THE NATURE OF MARKETING COSTS, SELLING COSTS AND ADMINI STRATION COSTS, IT IS THE SALES VALUE, WHICH IS THE KEY FOR BOTH IN CURRING OF THE EXPENSES AND APPORTIONMENT OF THOSE TO THE UNITS AN D (D) THE METHODOLOGY ADOPTED BY THE APPELLANT FOR APPORTIONM ENT OF THE COSTS INCURRED AT THE CORPORATE OFFICE, TO THE UNIT S, IS IN ACCORDANCE WITH THE GENERALLY ACCEPTED PRINCIPLES O F COST ACCOUNTING. F) THE EXPENSES INCURRED AT THE VARIOUS DEPARTMENTS LOCATED AT THE HEAD OFFICE SUCH AS SELLING AND DISTRIBUTION , MARKETING, LOGISTICS, PURCHASE PLANNING, EXPORTS DEPARTMENTS, ARE ALL INTRICATELY CONNECTED WITH THE SALES FUNCTION OF TH E APPELLANT. EVEN THE INTEREST AND FINANCE CHARGES ARE DIRECTLY CONNECTED WITH THE SALES FUNCTION. THE DETAILS AND DESCRIPTION OF THE EXPENSES INCURRED BY SUCH DEPARTMENTS CLEARLY INDICATE THAT SUCH EXPENSES ARE INTRICATELY CONNECTED WITH THE SALES MADE BY TH E APPELLANT. HENCE, THE LOGICAL AND CORRECT BASIS OF ALLOCATION OF SUCH EXPENSE HAS TO BE IN THE RATIO OF SALES MADE BY THE VARIOUS UNITS OF THE APPELLANT. SUCH EXPENSES HAVE NO CONNECTION WITH TH E NET PROFITS OF THE UNITS. THE NET PROFITS OF THE UNITS ARE DEPE NDENT ON AND ARE A FUNCTION OF THE SALES OF SUCH UNITS THUS THE AL LOCATION OF MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 4 EXPENSES INCURRED FOR INCREASING THE SALES OF THE U NITS MUST BE ALLOCATED ON THE BASIS OF SALES MADE BY EACH UNIT. G) EACH AND EVERY SELLING AND DISTRIBUTION EXPENSE AND CORPORATE EXPENSE HAS BEEN BIFURCATED AND THE BASIS AND THE METHOD ADOPTED BY THE APPELLANT HAS ALSO BEEN PLACE D BEFORE ME. THE UNIT-WISE PROFIT AND LOSS ACCOUNT OF THE AP PELLANT, WHICH HAS BEEN DULY RECONCILED WITH THE AUDITED PROFIT A ND LOSS OF THE APPELLANT, DULY EVIDENCES THIS VERY FACT. THERE IS NOT A SINGLE RUPEE OF SUCH EXPENDITURE, WHICH HAS NOT BEEN ALLOC ATED TO THE MANUFACTURING UNITS. H) THE CONTENTION OF THE AO THAT THE FOCUS OF ANY C ORPORATE IS TO ONLY TO MAXIMISE ITS PROFITS AND NOT SALES AND, HENCE, PROFITS IS THE CORRECT CRITERIA FOR BIFURCATION, APPEARS TO BE ECONOMICALLY IRRATIONAL. THE MAXIMIZATION OF PROFITS CAN BE ONE OF THE OBJECTS OF ANY CORPORATE. TO ACHIEVE THIS OBJECT, HOWEVER, ANY CORPORATE HAS TO FIRST INCREASE ITS SALES AND REVENUE AND THEREBY INCREASE ITS PROFITS. PROFITS CAN NEVER BE INCREASED WITHOUT AN INCREASE IN SALES AND REVENUE, AND THE ULTIMATE AIM OF ANY CORP ORATE IS TO ACHIEVE AN INCREASE IN SALES AND REVENUE. I) THE DEDUCTION UNDER SECTION 80IB AND 80IC IS GRA NTED ON THE INCOME OF THE ASSESSEE, AND NOT ON THE SALES MA DE BY AN ASSESSEE, I AGREE WITH THE APPELLANT THAT THIS CAN NEVER HAVE ANY BEARING WHATSOEVER ON THE BASIS OF ALLOCATION FOLLO WED BY AN ASSESSEE FOR ALLOCATING AND APPORTIONING SELLING AN D DISTRIBUTION AND CORPORATE EXPENSES INCURRED AT THE HEAD OFFICE, TO THE MANUFACTURING UNITS OF AN ASSESSEE. J) THE NET PROFIT OF A UNIT HAS TO BE COMPUTED AFT ER ALLOCATING ALL EXPENSES. ALLOCATING EXPENSES ON THE BASIS OF N ET PROFIT BEFORE ALLOCATION OF HEAD OFFICE EXPENSES IS ILLOGICAL AND ERRONEOUS FOR THE SIMPLE REASON THAT FOR DETERMINING THE NET PROF IT ITSELF, ALL EXPENSES HAVE TO BE CONSIDERED, INCLUDING EXPENSES, WHICH ARE TO BE ALLOCATED. THUS, ANY ALLOCATION OF HEAD OFFICE E XPENSES CANNOT BE MADE ON THE BASIS OF THE NET PROFIT BEFORE ALLOC ATION, BUT HAS TO BE MADE EITHER ON THE BASIS OF SALES, PURCHASES, EM PLOYEE COSTS OR ANY OTHER ITEM, WHICH ULTIMATELY CONSTITUTES A C OMPONENT OF THE NET PROFIT. UNLESS SUCH HEAD OFFICE EXPENSES ARE FI RST ALLOCATED AND CONSIDERED IN THE NET PROFIT COMPUTATION, THE N ET PROFIT OF A UNIT CAN NEVER BEEN ACCURATELY DETERMINED. THUS, I AGREE WITH THE APPELLANT THAT THE HEAD OFFICE EXPENSES HAVE TO BE FIRST APPORTIONED AND ONLY THEN, CAN THE NET PROFIT BE AC CURATELY DETERMINED AND THE NET PROFIT OF THE PARTICULAR UNI TS, BEFORE ALLOCATION, CAN NEVER FORM THE BASIS OF ALLOCATION OF HEAD OFFICE EXPENSES. MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 5 K) IF THE METHOD ADVANCED BY THE AO WAS CORRECT, AN D CORPORATE AND SELLING EXPENSES WERE TO BE ALLOCATED ON THE BASIS OF PROFITS, THE RESULTS WOULD BE ABSURD, AS HAS BEE N EXPLAINED ABOVE. I AGREE WITH THE ARGUMENT OF THE APPELLANT T HAT THE ALLOCATION OF ANY EXPENDITURE HAS TO BE DONE ON THE BASIS OF THE VALUE GENERATED BY THE ECONOMIC ACTIVITY FOR WHICH SUCH EXPENDITURE HAS BEEN INCURRED MARKETING EXPENSES HAVE A DIRECT NEXUS WITH SALES AND HENCE, ALL SUCH EXPENSE S MUST BE NECESSARILY ALLOCATED ON THE BASIS OF SALES OF THE RESPECTIVE UNITS AND CERTAINLY NOT ON THE PROFITS OF SUCH UNITS. SIM ILARLY, THE SUGGESTION OF THE AO THAT IN CASE OF A LOSS SUFFERE D BY A UNIT, THE LOSS COULD BE APPORTIONED TO THE OTHER UNITS AND NO ALLOCATION OF ANY FURTHER EXPENSES WAS NECESSARY IS COMPLETELY AG AINST NORMALLY ACCEPTED ACCOUNTING PRACTICES. L) THE APPELLANT HAS ALSO EXPLAINED THE VARIATION I N PROFITS OF VARIOUS MANUFACTURING UNITS IN DETAIL. DIFFERENT UN ITS MANUFACTURE DIFFERENT PRODUCTS IN VARYING ECONOMIC CONDITIONS A ND THE PROFITS OF EACH UNIT ARE BOUND TO VARY ACCORDINGLY. THE APP ELLANT HAS GIVEN A DETAILED EXPLANATION AND THE AO HAS NOT BEE N ABLE TO POINT OUT A SINGLE INSTANCE WHERE SOME EXPENDITURE HAS BEEN WRONGLY ALLOCATED OR ACCOUNTED OR ALLOCATED IN A MA LAFIDE MANNER OR WITH AN ULTERIOR MOTIVE TO INCREASE THE PROFIT O F AN ELIGIBLE UNIT. THE COMPLETE BASIS OF ACCOUNTING OF THE DIRECT EXPE NSES INCURRED AT VARIOUS MANUFACTURING UNITS AS ALSO THE BASIS OF ALLOCATION FOR THE SELLING AND DISTRIBUTION AND CORPORATE EXPENSES INCURRED AT THE HEAD OFFICE HAVE BEEN PLACED ON RECORD. THE UNI T-WISE PROFIT AND LOSS ACCOUNT HAS ALSO BEEN PLACED ON RECORD. I FIND THAT THE ALLOCATION HAS BEEN DONE ON A CONSISTENT BASIS, IN A SCIENTIFIC AND RATIONAL MANNER, ON THE BASIS OF SALES OR ON THE BA SIS OF THE ACTIVITY PERFORMED, AND EVERY SINGLE RUPEE OF HEAD OFFICE EXPENSE HAS BEEN ANALYSED AND ALLOCATED IN A SYSTEMATIC MAN NER. M) THE METHOD OF ACCOUNTING FOR EXCISE DUTY AT ALL THE UNITS HAS BEEN DULY EXPLAINED AND THERE IS NO ERROR IN SU CH ACCOUNTING. N) IT IS ALSO APPARENT FROM THE UNIT-WISE PROFIT AN D LOSS ACCOUNT, THAT EVEN IF THERE WAS NO ALLOCATION MADE IN RESPECT OF HEAD OFFICE EXPENSES, THE PROFITABILITY OF THE GAUH ATI UNIT IS HIGHER AS COMPARED TO THE OTHER UNITS OF THE COMPANY. AS PER THE FACTS ON RECORD, THIS IS THE ONLY UNIT OF THE COMPANY, WH ICH MANUFACTURES POWDER HAIR COLOUR. THIS PRODUCT IS A VERY HIGHLY PROFITABLE PRODUCT AND THE COMPANY IS THE MARKET LE ADER. THERE IS NO STRONG COMPETITOR IN THE MARKET AND HENCE THE COMPANY IS ABLE TO EARN A BETTER RATE OF RETURN AS COMPARED TO ITS OTHER PRODUCTS. UNDER THESE CIRCUMSTANCES, THE PROFITS OF THE SAID UNIT ARE BOUND TO BE HIGHER THAN THE OTHER UNITS. MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 6 O) FURTHER, IT IS NOT THE CASE OF THE APPELLANT THA T IT HAS NOT ALLOCATED THE HEAD OFFICE EXPENSES TO ALL THE MANUF ACTURING UNITS. THE APPELLANT HAS FAIRLY ALLOCATED ALL SUCH EXPENSE S TO ALL THE MANUFACTURING UNITS, DESPITE THE FACT THAT THERE AR E JUDICIAL DECISIONS IN SUPPORT OF THE FACT THAT NO SUCH ALLOC ATION IS NECESSARY. IN ALL SUCH CASES CITED BEFORE ME, THE D EPARTMENT HAD ITSELF ALLOCATED HEAD OFFICE EXPENSES ON THE BASIS OF SALES. IN THE CASE OF APPELLANT, THE ALLOCATION HAS BEEN DONE ON THE BASIS OF SALES MADE BY RESPECTIVE UNITS. I FIND THAT THE ALL OCATION IS COMPLETELY IN ACCORDANCE WITH THE GENERALLY ACCEPTE D ACCOUNTING AND COSTING PRACTICES. HENCE, THERE IS NO BASIS FOR ALLOCATING SUCH EXPENSES ON THE BASIS OF THE NET PROFIT OF THE MANU FACTURING UNITS. THEREAFTER THE LEARNED CIT(APPEALS) AT PARA 12 CONC LUDED AS FOLLOWS : 12. IN VIEW OF WHAT IS STATED IN THE FOREGOING, I FIND THAT THE APPELLANT DESERVES TO SUCCEED. THE SELLING AND DIST RIBUTION EXPENSES AND CORPORATE EXPENSES INCURRED AT THE HEA D OFFICE, HAVE CORRECTLY BEEN ALLOCATED TO THE MANUFACTURING UNITS ON THE BASIS OF SALES OR ON THE BASIS OF THE ACTIVITY PERF ORMED. THE EXPENSES INCURRED AT THE VARIOUS DEPARTMENTS LOCATE D AT THE HEAD OFFICE SUCH AS SELLING AND DISTRIBUTION, MARKETING, LOGISTICS, PURCHASE PLANNING, EXPORTS DEPARTMENTS, ARE ALL INT RICATELY CONNECTED WITH THE SALES FUNCTION OF THE APPELLANT. THE DETAILS AND DESCRIPTION OF THE EXPENSES INCURRED BY SUCH DE PARTMENTS CLEARLY INDICATE THAT SUCH EXPENSES ARE INTRICATELY CONNECTED WITH THE SALES MADE BY THE APPELLANT. HENCE, THE LOGICAL AND CORRECT BASIS OF ALLOCATION OF SUCH EXPENSES HAS TO BE IN T HE RATIO OF SALES MADE BY THE VARIOUS UNITS OF THE APPELLANT. THE COS T AUDITOR OF THE APPELLANT HAS DULY CERTIFIED THAT THE METHODOLO GY ADOPTED FOR APPORTIONMENT OF HEAD OFFICE COSTS TO THE MANUFACTU RING UNITS IS IN ACCORDANCE WITH THE GENERALLY ACCEPTED PRINCIPLE S OF COST ACCOUNTING. THE APPELLANT HAS AMPLY DEMONSTRATED TH AT THE METHOD SUGGESTED BY THE AO OF ALLOCATING HEAD OFFIC E EXPENSES ON THE BASIS OF NET PROFITS WOULD GIVE INCORRECT RE SULTS AND CANNOT FORM THE BASIS OF ALLOCATION. THE APPELLANT HAS GIV EN A DETAILED EXPLANATION IN SUPPORT OF ITS METHOD OF ALLOCATION AND THE AO HAS NOT BEEN ABLE TO POINT OUT A SINGLE INSTANCE WHERE SOME EXPENDITURE HAS BEEN ACCOUNTED IN A MALAFIDE MANNER OR WITH AN INTENT TO INCREASE THE PROFIT OF AN ELIGIBLE UNIT. THE ACCOUNTING OF THE DIRECT AND INDIRECT EXPENSES INCURRED AT VARIOU S MANUFACTURING UNITS AS ALSO THE BASIS OF ALLOCATION FOR THE SELLING AND DISTRIBUTION AND CORPORATE EXPENSES INCURRED AT THE HEAD OFFICE, HAS BEEN DONE ON A CONSISTENT BASIS IN A SC IENTIFIC AND SYSTEMATIC MANNER. THE ACTION OF THE AO IN ALLOCAT ING THE HEAD OFFICE EXPENSES ON THE BASIS OF THE NET PROFITS OF THE MANUFACTURING UNITS IS THEREFORE CLEARLY ERRONEOUS AND NOT MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 7 JUSTIFIED. THE AO IS DIRECTED TO COMPUTE THE PROFIT S OF THE ELIGIBLE UNITS ON THE BASIS ADOPTED BY THE APPELLANT AND TO RECOMPUTED THE INCOME OF THE ELIGIBLE UNITS ACCORDINGLY AND AL LOW THE DEDUCTION U/S 80IB/80IC AS CLAIMED BY THE APPELLANT . THUS, GROUND NOS. 1 & 2 ARE ALLOWED AND DECIDED IN FAVOUR OF THE APPELLANT. 9. WE FULLY AGREE WITH THESE FINDINGS. THE LEARNED CIT (APPEALS) HAS IN A VERY DETAILED MANNER DISCUSSED T HE ISSUE AND HAS COME TO THE CORRECT CONCLUSION. COST ACCOUNTANT S CERTIFICATE, STATUTORY AUDITORS APPROVAL OF THE ALLOCATION WERE CONSIDERED. ALL THE ERRORS COMMITTED BY THE AO WERE POINTED OUT. TH E LEARNED CIT(APPEALS) HAS HIMSELF VERIFIED THE METHODOLOGY F OLLOWED BY THE ASSESSEE. THE ABSURDITY OF THE METHOD SUGGESTED BY THE AO WAS BROUGHT OUT. THE LEARNED DR COULD NOT CONTRADICT AN Y OF THE FINDING OF THE LEARNED CIT (APPEALS). WE ARE CONVIN CED WITH THE DETAILED AND WELL REASONED ORDER OF THE LEARNED CIT (APPEALS). THUS WE UPHOLD THE ORDER OF THE FIRST APPELLANT AUT HORITY AND DISMISS GROUND NO. 1 OF THE REVENUE. 4. ACCORDINGLY, PARA NO.8 OF THE TRIBUNAL ORDER IN ITA NO.6290 AND 6323/MUM/2008 DATED 30.11.2010 IS RECTIFIED TO THE EXTENT OF REPRODUCTION OF TRIBUNAL ORDER IN THE ASSESSEES OW N CASE FOR THE A.Y. 2004-05 AND ACCORDINGLY, ABOVE PARAGRAPHS STAND SUB STITUTED IN PLACE OF ORIGINAL PARAGRAPHS. 5. IN THE RESULT, MA IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH AUGUST 2 011. SD/- SD/- ( B. RAMAKOTAIAH ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 19TH AUGUST 2011 . COPY TO:- 1) THE APPLICANT. MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 8 2) THE RESPONDENT. 3) THE CIT (A)X, MUMBAI. 4) THE CIT-MC-X, MUMBAI. 5) THE D.R. G BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN MA 137/MUM/2011 GODREJ CONSUMER PRODUCTS LTD. 9 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 05.08.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 05.08.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER