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2017 (7) TMI 426 - ITAT CHENNAIExpenditure incurred towards technical know-how - CIT(A) treating 75% of the expenditure incurred as revenue in nature and balance 25% is treated as capital in nature and entitled for depreciation - Held that:- The expenditure incurred by the assessee towards royalty to be considered as a revenue expenditure to be allowed as a revenue expenditure subject to 2% of the sales value and accordingly, this ground taken by the assessee is allowed. Disallowance u/s.14A r.w.Rule 8(2)(ii) - main contention of the A.R is expenditure incurred on earning exempted income by the assessee towards financials and interest charges includes interest and leased vehicles and bank charges and it does not pertain to earning of the exempted income - Held that:- In our opinion, there is a merit in the argument of the ld.A.R. Accordingly, if the assessee is able to prove that this expenditure are not relating to the earning of exempted income, this cannot be included in “A” in the Formula prescribed in Rule -8D(2)(ii) of Rules. Accordingly, we remit this issue to the file of AO for fresh consideration.
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