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2007 (9) TMI 629 - AT - Income TaxDeduction u/s 10A - Interest income derived from the industrial undertaking - HELD THAT:- Similar issue had arisen for consideration in assessee's own case for the assessment year 1999-2000 and this Tribunal in I.T. Appeal and held that interest income cannot be considered as part of the profits and gains derived from the business of export of computer software. This Tribunal has referred to the decision of the Hon'ble Supreme Court in the case of CIT vs. Sterling Foods [1999 (4) TMI 1 - SUPREME COURT] and ultimately concluded that interest income cannot form part of the income eligible for deduction u/s 10-A of the Act. Thus, first ground of appeal of the assessee, is dismissed. Expenditure incurred for earning dividend income - exempt u/s 10(33) - invoking the provisions of section 14A - HELD THAT:- In the present case, we find that no attempt has been made by the assessing officer to establish the expenses, which were incurred in earning the tax-free income. We may also add here that the decision of the Third Member in the case of Wimco Seedings Ltd. vs. DCIT [2006 (12) TMI 65 - ITAT, DELHI] in the absence of any decision of the Special Bench in Maruti Udyog Ltd. [2004 (10) TMI 278 - ITAT DELHI-A] to the contrary has a binding force as that of a Special Bench as laid down by the Special Bench of the Tribunal in the case of DCIT vs. Padam Prakash,[2006 (9) TMI 222 - ITAT DELHI-E]. Thus, we uphold the order of the CIT (Appeals) and dismiss the first ground of appeal of the Revenue. Addition on account of common expenses - HELD THAT:- Similar disallowance was made by the assessing officer and the Tribunal had an occasion to deal with the same and in I.T. Appeal for assessment year 1999-2000, The Tribunal deleted the similar addition made by the assessing officer. The Tribunal found that there were no common expenses attributable to the software unit, which were incurred or met by the head office and consequently no disallowance of expenses could be made in the head office account. In the present assessment year the assessing officer has merely followed the order in assessment year 1999-2000. The facts and circumstances being identical, we are of the view that the CIT (Appeals) was justified in deleting the addition made by the assessing officer. Consequently, ground No. 2 raised by the Revenue, is dismissed. Addition on account of notice pay - HELD THAT:- It is not in dispute that in AY 1999-2000 in this issue had come up for consideration before this Tribunal and the Tribunal held that the notice period pay was debited to the software division and when it was recovered, the same has to be considered as income derived by the industrial undertaking. The Tribunal held that such notice period pay would go to reduce the expenses on account of salary and this real nature of the transaction will not have any effect on the income derived by the assessee from the business of computer software. Respectfully following the aforesaid decision of the Tribunal, we uphold the order of the CIT (Appeals) and dismiss the third ground of appeal of the Revenue. In the result, both the appeals by the assessee and the Revenue, are dismissed.
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