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2020 (4) TMI 819 - ITAT DELHIDeduction u/s 80IB (8A) - royalty income on cotton hybrid seeds AND miscellaneous income - whether assessee company has not carried out any research activities during the year under assessments rather merely surviving on insect tolerance technology for BT Cotton created by Mahyco Monsanto Biotech (I) Ltd. (MMB) on payment of “trait value” and has been receiving royalty from the parties by merely passing on the technology of MMB as has been held by AO/CIT(A) in AY 2010-11? - HELD THAT:- When we refer to clauses 4 & 5 of the Tripartite Agreement, it is clear that the payment of trait value by SBGIL to MMB is only on behalf of assessee company which is required to be accounted for in the books of account of the assessee company. From this arrangement, it is safely concluded that when SBGIL claimed to have used parent seeds developed by the assessee company then why the payment of trait value has been made by SBGIL to MMB. When we examine aforesaid facts which have come on record from sub-licencee agreement and tripartite agreement in the light of the arguments addressed by the ld. AR for the assessee that “assessee is an approved research company by the Department of Scientific and Industrial Research, Ministry of Science & Technology since AY 2004-05. Matter is required to be remitted back to the AO who shall examine afresh if the assessee company has carried out any scientific research and development activities during the year under assessment independent of the technology purchased from MMB in the light of Agreement (supra) between assessee company and MMB an tripartite agreement between assessee company, MMB and SBGIL, keeping in view the observations made herein before by providing an opportunity of being heard to the assessee, hence the appeals filed by the assessee as well as Revenue are allowed for statistical purposes.
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