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2013 (9) TMI 440 - AT - Income TaxProduct development cost as revenue expenditure - Assessee company was engaged in the business of manufacturing and selling of writing instruments - Assessee had claimed an amount of Rs. 2,55,481/- as product development cost under the head 'other direct expenses' Held that:- Assessee pointed out that these expenses were incurred on the development of dyes and jigs, which were developed for a particular type of packaging for good customers and had limited life - Not accepted the assessee's contention, inter alia, observing that these dyes brought an advantage of an enduring nature to the assessee - Allowed depreciation @ 25% being 63,870/- and made an addition of Rs. 1,91,611/. Allowability of expenditure under section 80IB on account of delay in submission of filing of the audit report Held that:- Assessee had filed the audit report in form No. 10CCB and, therefore, the provisions of section 80IA(7) being directory in nature, therefore held that the assessee was entitled for deduction under section 80IB. Quantification of deduction under section 80IB Held that:- Assessee was not entitled for deduction under section 80IB in respect of job work charges and profit on purchase and sales of trading goods - While quantifying deduction, under section 80IB, it was computed the profit of job work in the same ratio as net profit ratio (2.63) divided by sales Also, Assessee had claimed deduction, under section, 80IB in respect of the other income amounting to Rs. 10,33,913/- - Being, not clear whether the entire sum of Rs. 10,33,913/- was required to be reduced or only profit element of job work charges had to be reduced issue restored to the file of the Assessing Officer to verify the computation with reference to financial statements and form No. 10CCB submitted by assessee.
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