Per Shri P.M. Jagtap :- This appeal is preferred by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-XXXII, Kolkata dated 22.01.2010 for the assessment year 2000-01 and the same is being disposed of along I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 2 of 8 with the Cross Objection filed by the assessee being C.O. No. 105/KOL/2010.

2. The issue involved in Grounds No. 1 & 2 of the Revenues appeal relates to the deletion by the ld. CIT(Appeals) of the addition made by the Assessing Officer to the total income of the assessee by restricting its claim for deduction under section 80IA of the Act.

3. The assessee in the present case is a Company, which is engaged in the business of manufacturing, sale, export and renovation of Cooling Towers. The return of income for the year under consideration was filed by it on 30.11.2000 declaring total income of Rs.10,29,77,670/-. In the assessment originally completed under section 143(3), the total income of the assessee was determined by the Assessing Officer at Rs.10,47,99,116/-. The said assessment was subsequently reopened by the Assessing Officer and in the assessment completed under section 143(3) read with section 147 vide order dated 31.03.2005, the total income of the assessee was determined by him at Rs.11,11,03,452/- after making addition, inter alia, by restricting the claim of the assessee for deduction under section 80IA. On appeal, the ld. CIT(Appeals) deleted the said addition made by the Assessing Officer. On further appeal, the Tribunal vide its order dated 22.02.2007 restored the issue relating to disallowance under section 80IA to the file of the Assessing Officer with a direction to consider and decide afresh the aspect of allocation of certain expenses, such as brokerage and commission, trade advertisement, Bank charges, sales promotion and R&D expenses to Bhasa Unit after giving the assessee reasonable opportunity of being heard. During the course of set aside proceeding, it was submitted on behalf of the assessee before the Assessing Officer that the expenses in question were relating to its Head Office and the same were not required to be allocated to Bhasa Unit for the purpose of computing the profit of the said Unit eligible for deduction under section 80IA. This stand of the assessee was not found acceptable I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 3 of 8 by the Assessing Officer. According to him, the burden of the said expenses had to be passed to the Unit producing the components otherwise the profit arrived for the Units will give the distorted picture. Accordingly, 30% of such expenses amounting to Rs.8,46,440/- were allocated by the Assessing Officer to Bhasa Unit and deduction claimed by the assessee under section 80IA was restricted by him to that extent.

4. The assessee again preferred an appeal before the ld. CIT(Appeals) challenging the action of the Assessing Officer in restricting its claim for deduction under section 80IA and after considering the submissions made by the assessee as well as the material available on record, the ld. CIT(Appeals) held that the direct and indirect expenses relating to the Bhasa Unit having been duly considered while computing the profit of the said Unit, the action of the Assessing Officer in allocating Corporate Office expenses, which did not relate to the Bhasa Unit, was not correct. Accordingly, the disallowance made by the Assessing Officer on this issue was deleted by the ld. CIT(Appeals).

5. The ld. D.R. submitted that the expenses incurred by the Head Office or Corporate Office of the assessee-Company, which are common in nature, are required to be allocated to compute the profit of Bhasa Unit of the assessee-company as rightly held by the Assessing Officer and the ld. CIT(Appeals) was not justified to accept the profit computed by the assessee of Bhasa Unit for the purpose of claiming deduction under section 80IA without allocating such expenses.

6. The ld. Counsel for the assessee, on the other hand, submitted that the expenses in question are relating to the Head Office of the assessee- company and there is no dispute about the same. Relying on the decision of the Coordinate Bench of this Tribunal in the case of Balrampur Chini Mills Ltd. vs.- DCIT reported in 140 TTJ 73, he contended that such expenses incurred by the assessee, which are not directly incurred for the I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 4 of 8 eligible unit, cannot be allocated on pro-rata basis for computing the profit of such unit eligible for deduction. He also relied on the decision of the coordinate Bench of this Tribunal in the case of DCIT vs.- Sicpa India Private Limited rendered vide its order dated 04.12.2015 in ITA No. 599/KOL/2012.

7. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that a similar issue had come up for consideration before the Tribunal in the case of Sicpa India Pvt. Limited in the context of computation of the profit of the eligible Unit of the assessee for deduction under section 80IC and the same has been decided by the Tribunal vide its order dated 04.12.2015 (supra) in favour of the assesese for the following reasons given in paragraph no. 4:- 4. We have heard the arguments of both the sides and also perused the relevant material available on record. Although the ld. D.R. has contended that the profit eligible for deduction under section 80IC is to be worked out after deducting all the direct and indirect expenses, the deduction under section 80IC, as pointed out by the ld. Counsel for the assessee, is in respect of any profit and gains derived by the eligible Undertaking. As submitted by the ld. Counsel for the assesese in this regard, the words derived from has a narrow meaning, inasmuch as it contemplates first degree connection with the eligible Unit as held, inter alia, by the Honble Supreme Court in the case of Pandian Chemicals Limited reported in 262 ITR 278 and this principle laid down by the Honble Supreme Court in the context of income is also applicable for the allocation of expenses as held by the Coordinate Bench of this Tribunal in the case of Balarampur Chini Mills Limited vs.- DCIT reported in 140 TTJ

73. In the said case, it was held by the Tribunal that expenses incurred by the assesese under the general head of Office Expenses, which are not directly incurred for the eligible Unit, cannot be said to have first degree connection with such Unit so as to reduce the same on pro rata basis for computing the profit of such Unit eligible for deduction. In our opinion, the issue involved in the present case thus is squarely covered by the decision of the Coordinate Bench of this Tribunal in the case of Balarampur Chini Mills Limited (supra) and respectfully following the same, we uphold the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue. I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 5 of 8 In our opinion, the decision of the Coordinate Bench of this Tribunal in the case of Sicpa India Pvt. Limited (supra) is squarely applicable in the present case and respectfully following the same, we uphold the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue. Grounds No. 1 & 2 of the Revenues appeal are accordingly dismissed.

8. In Ground No. 3, the Revenue has challenged the action of the ld. CIT(Appeals) in directing the Assessing Officer to treat the share- badla income of the assessee as speculative income instead of income from other sources as treated by the Assessing Officer

9. During the course of set aside proceedings under section 254/147/143(3), it was found by the Assessing Officer that the assessee has claimed speculation profit of Rs.1,07,44,674/- and has set off the same against the carried forward speculation loss of A.Y. 1993-94. It was also noted that the said speculation profit claimed by the assessee was inclusive of share-badla income of Rs.91,53,269/-. According to him, the said share-badla income was assessable to tax under the head income from other sources as it involved physical transfer of shares. He accordingly entertained a belief that the income of the assessee chargeable to tax had escaped assessment on this count and in order to bring the same to tax, a notice under section 148 was issued by him to the assessee on 12.09.2006. The assessee challenged the validity of the said notice by submitting that all the relevant details of the Badla transactions were duly filed along with the return of income originally filed on

3011.2000. It was also submitted by the assessee that the share-badla income was earned on sale of shares without taking actual delivery thereof. It was submitted that the assessee basically is an investor, who made investment in share-badla transactions. Accordingly, some amount was given to a share-broker, who on behalf of the assessee invested the said amount in shares of different Companies. The relevant transactions I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 6 of 8 were either squared off during the trading period itself or were carried forward to the next settlement. It was pointed out that the physical delivery of shares in either case, however, was not taken and since the transactions in shares were done without any physical delivery of shares, the profit earned from the transactions was in the nature of speculation profit. The stand of the assessee was not found acceptable by the Assessing Officer. According to him, the profit from badla transactions on account of difference in rates of current settlement or next settlement was liable to be taxed in the hands of the assessee as the income from other sources instead of speculative income and accordingly the same was brought to tax by him in the hands of the assessee without allowing its claim for set off against the speculation loss of earlier years.

10. On appeal, the ld. CIT(Appeals) allowed the claim of the assesese to treat the share-badla income as speculative income by relying on the order of his predecessor in assessees own case for assessment year 1994-95 in pursuance of which the similar claim of the assessee was accepted by the Assessing Officer himself.

11. We have heard the arguments of both the sides and also perused the relevant material available on record. Although the ld. D.R. has relied on the order of the Assessing Officer in support of the revenues case on this issue, it is observed that the ld. CIT(Appeals) in assessees own case for A.Y. 1994-95 had directed the Assessing Officer to verify the similar claim of the assessee for treating the income from badla transactions as speculative profit and to adjust the same against speculation loss vide its order dated 15.12.1997 and while giving effect to the said order of the ld. CIT(Appeals), the Assessing Officer vide its order dated 05.02.1998 treated the badla transactions income as speculation profit and adjusted the same against speculation loss. As pointed out by the ld. Counsel for the assessee, the order of the ld. CIT(Appeals) dated 15.12.1997 for A.Y. 1994-95 on this issue has been accepted by the Department and no appeal I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 7 of 8 has been filed against the same before the Tribunal. Keeping in view all these facts of the case including especially the fact that the Assessing Officer himself has treated the similar badla transactions profit as speculation profit in assessees own case for A.Y. 1994-95, we find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) directing the Assessing Officer to treat the share badla income as speculative income and to adjust the same against the speculation loss. The impugned order of the ld. CIT(Appeals) on this issue is, therefore, upheld and Ground No. 3 of the Revenues appeal is dismissed.

12. As a result of our decision rendered above upholding the impugned order of the ld. CIT(Appeals) deleting both the additions made by the Assessing Officer in the assessment made under section 254/147/143(3), the issue raised by the assessee in the Cross Objection challenging the validity of the said assessment has virtually becomes infructuous as agreed even by the ld. Counsel for the assessee. We, therefore, do not consider it necessary or expedient to adjudicate upon the same and keep it open with a liberty to the assessee to pursue the same if the situation so arise in future. The Cross Objection filed by the assessee is accordingly dismissed.

13. In the result, the appeal of the Revenue and Cross Objection of the assessee both are dismissed. Order pronounced in the open Court on March 02, 2016. Sd/- Sd/- (S.S. Viswanethra Ravi) (P.M. Jagtap) Judicial Member Accountant Member Kolkata, the 2 n d day of March, 2016 Copies to : (1) Assistant Commissioner of Income Tax, Central Circle-XX, Kolkata, 18, Rabindra Sarani, Kolkata-700 001 I.T.A. N o. 1 3 6 9 / KO L ./2 0 1 0 & C.O. No. 1 0 5 /KO L/2 0 1 0 (in ITA N o. 1 3 6 9 / KO L /2 0 1 0 ) As s es s me nt y e ar : 2 0 0 0 -2 0 0 1 Page 8 of 8 (2) M/s. Paharpur Cooling Towers Limited, 8/1/B, Diamond Harbour Road, Kolkata-700 027 (3) Commissioner of Income-tax (Appeals)-XXXII, Kolkata (4) Commissioner of Income Tax, Kolkata (5) The Departmental Representative (6) Guard File By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.