9911796707
TMI Blog797/CBDT.X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for deductions under section 80-O:- (i) Deduction is available only in respect of income by way of royalty, commission, fees or any similar payment. (ii) Further, such income should be received by the assessee from the Government of a foreign State or a foreign enterprise in consideration for the use outside Indian of any patent, invention, model, design, secret formula or process or similar property right (hereinafter referred to as 'technical know-how' or information concerning industrial, commercial or scientific knowledge, experience or skill (hereinafter referred to as 'information) made available or provided or agreed to be made available or provided to such Government or enterprise by the assessee or in consideration of techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the matter referred to the Board. (vi) Recently, a case has come to notice where deduction was allowed under section 80_O, though the agreement had not been approved either by the Central Government or the Board. There is no reason why such a mistake should have occurred. No deduction under section 80_O should be allowed unless the ITO has received the Board's approval order from the Commissioner of Income tax. If an assessee produces his copy of the order of approval by the Board but the ITO has not received his copy from the Commissioner, the matter should be referred to the commissioner/Board. (vii) The order of approval issued by the Board provides, inter alia, that the grant of deduction will be subject to the assessee fulfilling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of net income under section 80-O by minimising the expenses relating to the activities covered by section 80-O and diverting a part of those expenses to other incomes which do not enjoy any tax exemption. The deduction to the granted under section 80-O (including the allocation expenses against such income should be quantified by the ITO with approval of the Inspecting Assistant Commissioner who may, in suitable cases, consult the Commissioner of Income-tax. (x) The claim for deduction under section 80-O should be dealt with in detail in a separate and self-contained paragraph in the assessment order rather than dealing summarily with the claim, as for example by saying "deduction allowed under section 80-O as claimed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1970-71, a foreign institution, association or body could not be regarded as a 'company' unless it had been declared to be a 'company' by an order of the Board (or it was assessable or was assessed under the Income Tax Act, 1922, as a company for the assessment year 1947-48). From the assessment year 1971-72, any body corporate incorporated by or under the laws of a country outside India is regarded as 'company' and no declaration by the Board is necessary. But any other institution, association or body, whether incorporated or not, can be regarded as a company only if it has been declared by the Board to be a company (unless it is or was assessable or was assessed as a company for any assessment year upto 1970-71). Attenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contained in paragraph 30 of Board's Circular No.138 dated 17.6.74. (xiv) The expression "convertible foreign exchange" has been defined in the Explanation to section 80-N to mean foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purpose of the law for the time being in force for regulating payments and dealings in foreign exchange. This definition also applies for the purposes of section 80-O of the Act. The RBI has since clarified that the following currencies are treated by them as convertible foreign exchange with effect from the dates shown against them for the purposes of regulating payments and dealings in foreign exchange: If deduction is claimed in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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