Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 1188 - AT - Income TaxDisallowance u/s 14A of the Act read with Rule 8D -CIT-A deleted the addition - HELD THAT:- The impugned Assessment Year is 2007-2008. The jurisdictional High Court in the case of Maxopp Investment Ltd. 2011 (11) TMI 267 - DELHI HIGH COURT] has laid down that Rule 8D would apply only from the AY 2009-10. Thus the order of the Ld.CIT(A) on this count is hereby upheld. Disallowance of product development expenses on the ground that the same is deferred revenue expenditure - only ground of disallowance is that the assessee has got an enduring benefit for a period of 3 years - HELD THAT:- Undisputed fact is that the expenditure in question is incurred for preparation of samples as per requirement of foreign buyers.The assessee company dealing with the wide range of buyers for apparels, home furnishings and other accessories. It has a separate dedicated product team, working to create new designs in style. Prototype designs are developed and sent to different buyers - As decided in MAX INDIA LTD. [2006 (6) TMI 422 - ITAT AMRITSAR] the expenses incurred by the assessee for improving and developing new varieties of films were not capital in nature since these did dnot pertain to extension of its business nor there was any ;change in the installed capacity. Also, the expenses were donot subject to section 35D of the Act as they were allowable u/s 37(1) of the Act even if the assessee had amortised these expenses in its books of accounts - claim of the appellant for allowability of impugned expenditure as revenue expenditure is justified - Decided in favour of assessee.
|