IN THE INCOME TAX APPELLATE TRIBUNAL “H” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.1041/MUM/2018 Assessment Year : 2004-05 Hindustan Unilever Ltd.

Unilever House B.D. Sawant Marg, Chakala Andheri (E), Mumbai – 400099 ……………. Appellant PAN: AAACH1004N v/s Deputy Commissioner of Income Tax -

1(1)(1), Aayakar Bhavan, Mumbai – 400020 ……………. Respondent ITA No.929/MUM/2018 Assessment Year : 2004-05 Deputy Commissioner of Income Tax, 1(1)(2), 579, Aayakar Bhavan, M.K. Road, ……………. Appellant Mumbai – 400020 v/s M/s. Hindustan Unilever Ltd. 165/166, Backbay Reclamation, Mumbai – 400020 PAN: AAACH1004N ……………. Respondent CO No.142/MUM/2019 (Arising out of ITA No.929/Mum/2018)

Assessment Year : 2004-05 Hindustan Unilever Ltd.

Unilever House, B.D. Sawant Marg, Chakala, Off Western Express Highway, Andheri (E), Mumbai – 400099 PAN: AAACH1004N ……………. Cross Objector (Original Respondent)

v/s Deputy Commissioner of Income Tax, 1(1)(2), 579, Aayakar Bhavan, M.K. Road, ……………. Respondent Mumbai – 400020 (Original Appellant)

Assessee by : Shri Nishant Thakkar Ms. Jasmin Amalsadvala Revenue by : Shri Ajay Chandra, CIT-DR Date of Hearing – 02/12/2025 Date of Order – 30/01/2026

O R D E R

PER BENCH Both the assessee as well as the Revenue are in appeal/cross objection before us against the impugned order dated 24/11/2017, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)-56, Mumbai, [“learned CIT(A)”], for the assessment year 2004-05.

ITA No. 1041/Mum/2018

Assessee’s appeal - A.Y. 2004-05

2. In this appeal, the assessee has raised the following grounds: –

“Based on the facts and circumstances of the case, Hindustan Unilever Limited (hereinafter referred to as 'the Appellant') respectfully craves leave to prefer an appeal against the order passed by learned Commissioner of Income-tax (Appeals) - 56, Mumbai [hereinafter referred to as 'CIT(A)") dated 24.11.2017 on the following grounds, each of which are without prejudice to one another. On the facts and in the circumstances of the case and in law, the CIT(A) on fact and in law has:

Allocation of head office expenses unconnected with the undertakings for calculation of deduction under section 801B and section 10B

1. erred in holding that for the purposes of section 801B and section 10B the profits derived from the new industrial undertakings ought to be reduced by the amount of certain common expenses incurred at the Head Office on certain central departments which cannot be identified with any of the industrial undertakings of the appellant eligible for deduction under section 801B & 10B. 2. failed to appreciate that the appellant has allocated all the expenses including those common expenses which were relevant to compute the profit derived from the concerned industrial undertakings such as marketing, sales & distribution, purchasing, export department, etc.

3. failed to appreciate that the Head Office expenses, not allocated by the appellant, are only those overheads which in any case have to be incurred by the appellant irrespective of the existence of the new undertakings whose profits are eligible under section 801B & 10B and are in no way dependent on the said new industrial undertakings and therefore cannot be considered and allocated in arriving at the amount of profits derived from the said undertakings.

Expenditure attributable to earning of tax-free income - Section 14A disallowance

4. erred in confirming disallowance under section 14A in respect of expenditure in relation to tax free income.

CENVAT on closing stock - Section 145A

5. erred in confirming adjustment to the value of closing stock of raw materials and packing materials by Rs. 43,31,47,338/- representing the unutilised balance of Cenvat as on 31.3.2004.

Reduction in deduction under section 80 HHC

6. erred in reducing the export turnover by an amount of Rs. 9,26,74,373/- in respect of sales proceeds not realised.

7. e