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2017 (2) TMI 791 - AT - Income TaxDisallowance u/s.14A r.w.r 8D - Held that:- We find that the assessee had not claimed any exempt income in its return. However he made disallowance of ₹ 1.25 crores(Rs.1.19 crores interest expenditure + ₹ 6.89 lakhs administrative expenses) and same was upheld by the FAA. The pre-requisite to invoke the provisions of section 14A r.w.r.8D of the Rules is that the assessee should have claimed some expenditure against exempt income. In the case under consideration, no exempt income was shown by the assessee in its return, so, there was no justification for making disallowance of any kind. Disallowance being loss incurred due to revaluation of open forward exchange contract - Held that:- We find that in the case of M/s. D.Chetan & Co. [2016 (10) TMI 629 - BOMBAY HIGH COURT] held that Tribunal was justified in deleting the addition of 'Mark to Market' Loss made by the Assessing Officer on account of disallowance of loss on foreign exchange forward contract loss. - Decided in favour of assessee MAT computation on Disallowance u/s 14A - Held that:- As no addition should have been made u/s.14A for the year under consideration. Following the same, we hold that addition confirmed by the FAA for computing the book profit u/s.115JB has to be deleted. Consideration received on assignment of patent - applicability of provisions of section 55(2) - Held that:- The patent was for the purpose to have right to manufacture /produce/ process some article/thing. The patent was registered for commercial exploitation of the same in India as well as in the international market. It was transferred to the assignee for exploiting it commercially. Section 55(2)(a) talks of right to manufacture, produce or process any article or thing.Therefore, as per the amended provisions, the right to manufacture/ produce/ process would be taxable under the head capital gains and cost has to be taken at Rs. nil. In these circumstances, in our opinion the FAA has rightly invoked the provisions of Section 55 and taxed the disputed amount under the head capital gain. - Decided against the assessee. Sum received on sale of patent / know-how known as “Profofal” - capital receipt OR trading receipt - Held that:- After hearing the rival submissions, we are of the opinion that the FAA had rightly treated the disputed amount as capital receipt and had taxed it as capital gain u/s.55 (2) of the Act. The assessee was not in the business of purchase and sale of patents, so the sale proceed of the assignment agreement could not be treated a revenue receipt.
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