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2015 (2) TMI 493 - AT - Income TaxPayments during the year to institutions for technical services - payment made on registration of patents - whether capital expenditure? - Held that:- As per the Memorandum of Association of the assessee, it is not in dispute that one of the objects of the assessee company is to conduct scientific technical and industrial research. After a careful perusal of the assessment order and the order of the Ld. CIT(A), we find that none of these authorities have discussed the Research agreement dt. 16.11.2000 which is between Unilever PLC and Unilever N.V and the assessee. Under the head ‘scope’ this agreement clearly provides for the services to be rendered by the assessee to Unilever group of companies for which ‘fees’ have been provided. We, further find that there is a specific clause in this agreement relating to ‘intellectual property rights’. We find that none of the revenue authorities have considered the facts of the case in the light of this agreement of the assessee. The AO is directed to decide this issue afreshn the light of clause (III) in the agreement dt. 16.11.2000 under the head “intellectual property rights”. - While deciding this issue afresh, the AO is also directed to consider the additional plea of the assessee u/s. 35(1)(ii) and Sec. 35(1)(iv) of the Act as per provisions of law - Decided in favour of assessee for statistical purpose. Disallowance of expenditure for earning tax free dividend income at 5% of the dividend income - Held that:- We find that the assessee has not allocated any expenditure for earning the exempt income, therefore, the AO was required to disallow certain expenses relatable to exempt income on proportionate basis for which the AO has disallowed 5% of the dividend income. The disallowance being very reasonable, we do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against assessee. Chargeability of interest u/s. 234D - Held that:- It is now well settled that provisions of Sec. 234D are with retrospective effect. We, therefore, do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against assessee.
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