Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2013 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (3) TMI 351 - DELHI HIGH COURTInvestment allowance - Refusal to issue certificates to the petitioner under section 32A(2B)(ii) - It is the case of the petitioner that he has manufactured or produced caustic soda, liquid chlorine and hydro-chloric acid by using the technology (including the process) and other know-how developed by Central Electrochemical Research Institute (CECRI), which is a unit of National Research and Development Corporation of India (NRDC), a specified laboratory therefore, the certificate ought to have been issued - writ of mandamus directing the respondent No.3 to grant investment allowance at the higher rate of 35% as claimed by the petitioner as against the rate of 25% already granted by the income tax department Held that:- On going through the provisions of section 32A(2B)(ii) three conditions were necessary before the higher rate of 35% could be claimed. Firstly the right to use such technology (including any process) or other know-how or to manufacture or produce such article or thing must have been acquired from the owner of such laboratory or from any person deriving title from such owner. Secondly, the assessee was required to furnish, alongwith his return of income for the assessment year for which the deduction was claimed, a certificate from the prescribed authority to the effect that such article or thing was manufactured or produced by using such technology (including any process) or other know-how developed in such laboratory or was an article or thing invented in such laboratory. And, thirdly, the machinery or plant was not used for the purpose of business of manufacture or production of any article or thing specified in the list in the 11th schedule. It is an admitted position that the third condition has no applicability in the present case. The second condition is the issue in dispute as to whether such a certificate ought to have been issued or not. In so far as the first condition is concerned, the same seems to have been satisfied because the technology had been invented and developed by CECRI which was a unit of NRDC and had been licenced to TEAM and, in turn, TEAM had licenced that technology to the petitioner and, therefore, the right to use that technology had been acquired from TEAM, which was a licensee of NRDC. The only question that remains to be considered is whether the petitioner employed the technology which was developed by CECRI for the manufacture of its product, that is, caustic soda. As already pointed out above that the petitioner had entered into a composite transaction with TEAM. One component was the purchase of TSIA and the other component was the right to use the technology whereby the said TSIA was used in the manufacturing of caustic soda. Both, the technology for the manufacture of TSIA and the process whereby the TSIA so manufactured was employed for producing caustic soda were developed by CECRI. One component has been utilised by TEAM for the manufacture of TSIA and the other component which relates to the know-how as regards the practical application of TSIA in the manufacture of caustic soda was employed by the petitioner. Therefore, it cannot be said that the petitioner did not employ new plant or machinery for the manufacture or production of caustic soda by using technology or process developed by CECRI. As a result, respondent Nos.1, 2 & 5 are directed to issue the appropriate certificates under section 32A(2B) to the assessee & the same may be presented by the petitioner to the income tax authorities for consequential reliefs in accordance with law - in favour of assessee.
|