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2014 (11) TMI 600 - HC - Income TaxForfeiture of staff security – exempted income or taxable receipt – Held that:- The Tribunal rightly of the view that the contention of the revenue for treating forfeited amount as taxable income is fully supported by the decision in Atlas Cycle Industries Limited Versus Commissioner Of Income-Tax, Patiala [1980 (3) TMI 43 - PUNJAB AND HARYANA High Court] - the amount of ₹ 91,216/is intimately connected with the business activities of the assessee company and has rightly been treated by the AO as taxable receipt - considering the business of the assesse-company, it can be said that the amount is intimately connected with the business activities of the assessee company and the amount has rightly been treated as taxable receipt – Decided against assessee. Technical know-how fees disallowed – Held that:- The expenses on account of technical knowhow fee have resulted in the amalgamation or expansion of the profit earning apparatus of the assessee company and clearly relate to capital field - In Alembic Chemical Works Company Limited Versus Commissioner of Income-Tax, Gujarat [1989 (3) TMI 5 - SUPREME Court] – it has held that if the expenses incurred by the assesse are in the capital field and are inextricably connected with the capital structure of the company, it would be capital in nature - the assessee has acquired technical knowhow, technical and scientific information and knowledge for the manufacture of dryers, which is clearly an addition of enduring nature connected with the strengthening of the infrastructure of business - The expenditure is capital in nature – Decided in favour of assessee.
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