The assessee claimed deduction under section 10AA in respect of its Special Economic Zone unit. The Assessing Officer allocated common head office expenses, including directors’ commission, directors’ fees, audit and certification charges, and bank and loan processing charges, to the eligible unit in the ratio of turnover. The Tribunal held that common expenditure having a direct nexus with the activities of the eligible unit had to be allocated on a reasonable and scientific basis for determining the correct profits of the eligible undertaking. Since the eligible unit had not incurred any loss during the relevant years, the allocation made by the Assessing Officer was justified.  The Assessing Officer recomputed the profits of the eligible unit by adopting a notional gross profit rate in respect of goods transferred from the non-eligible units. The Commissioner (Appeals) reduced the addition without examining whether the goods had been transferred at their market value. The Tribunal restored the matter to the Assessing Officer to determine the fair market value of the goods transferred for computing the profits of the eligible unit.  (AY. 2011-12 to 2016-17).