Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 1818 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - CIT(A) deleted the expenditure on account of interest because the assessee received the interest free fund from India Value Fund - HELD THAT:- CIT(A) has applied the provision of section 14A r.w.r. 8D (111) @ 0.5% on the basis of the finding of the Godrej & Boyce Mfg. Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] on account of administrative and managerial expenses to the tune of Rs.63,250/-. No illegality and infirmity has been seen in the finding of the CIT(A) in question. CIT(A) has passed the order on this issue judiciously and correctly which is not require to be interfere with at this appellate stage. Hence this issue is decided in favour of assessee against the revenue. Capital receipt - Compensation receipt on termination of contract - AO disallowed the said compensation paid for ASTA and RCA treating the same as capital expenditure within the meaning of section 28(va) - HELD THAT:- CIT(A) has dealt both the transactions separately. The first transaction was in connection with the payment on account of termination of agreement with SIPL. The Assessing Officer dealt the said transaction as capital in nature. The appellant entered into an agreement with SIPL for procuring advertisement from clients. Dispute arose, therefore, the said agreement was terminated in view of the termination. The appellant company paid an amount as compensation. It is to be decided what should be nature of this kind of payments. The CIT(A) dealt the matter in view of the law settled in CIT Vs. Glaxo Laboratories India P. Ltd. [1977 (11) TMI 34 - BOMBAY High Court] wherein such type of transaction was held to be business expenditure. The assessee also relied upon the law settled in J & S (P) Limited [1984 (5) TMI 40 - DELHI HIGH COURT] and Empire Jute Co. Ltd. [1980 (5) TMI 1 - SUPREME COURT] and Alembic Chemical Works [1989 (3) TMI 5 - SUPREME COURT] No authority contrary to the said law has been produced before us. The factual position is quite same which has been dealt by the CIT(A) in question. No doubt in the said circumstances, we are of the view that the CIT(A) has decided the matter judiciously and correctly on this point. Coming to the transaction in connection with the payment on account of non competing the business of the appellant for another 2½ years - This controversy has also been adjudicated by the CIT(A) on the basis of the finding in case of Guffin Chem P. Ltd. [2011 (3) TMI 6 - SUPREME COURT] The relevant para has been produced above while enumerating the finding of the CIT(A) in which this type of transaction has been dealt as capital receipt. Depreciation has rightly allowed accordingly. We are of the view that the said transaction has also been dealt by the CIT(A) in accordance with law specifically in view of the circumstances when no distinguishable facts and law have been produced before us. Nature of expenses - treatment of computer software license fees - revenue or capital expenditure - HELD THAT:- It is not in dispute that the revenue has already dealt this issue while deciding the matter in the A.Y.2009-10 in which the said transaction has been treated as revenue expenditure. On the basis of the said decision, the present issue has been decided by the CIT(A) in favour of the assessee in the present A.Y. i.e. 2008-09. Nothing came into the notice that the finding of the CIT(A) for the A.Y.2009-10 on this issue is under challenged or not. - Decided in favour of assessee. Nature of receipts - interest income - Business income or income from other sources - HELD THAT:- This issue was also there in appellant’s case in A.Y.2007-08 wherein the undersigned held that the interest income earned on FDs made with the bank as margin money for obtaining bank guarantee, etc. was assessable under the head business income. Following the appeal order of A.Y.2007-08, the A.O. is directed to assess the interest income under the head business income.
|