TMI Blog2015 (1) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... by paying nominal lease rent and that the lease rent paid by the assessee to GIDC was allowable as revenue expenditure – Decided in favour of assessee. Allowability of business loss suffered in China – Held that:- Since, it is an admitted position that the assessee has got decree of a foreign court in his favour, and therefore, there being a possibility of realizing the amount in near future, the Tribunal was justified in holding that business loss suffered by the appellant in China is not allowable in the year under consideration – Decided against assessee. Eligibility for deduction u/s 80I and 80IA - Income from Advance License Benefit Receivable, Pass Book Benefit Receivable and profit on sale of import license is not derived from industrial undertaking – Held that:- Following the decision in M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT] wherein it has been held that DEPB / Duty drawback are incentives which flow from the schemes framed by the Central Government or from Section 75 of the Customs Act, 1962 - Incentive profits are not profits derived from eligible business u/s 80I-B - they belong to the category of ancillary profits o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto, the case of the assessee was examined and the AO concerned, assessed its income at ₹ 18,29,00,840/-. Hence, the assessee approached the CIT(A) against the same and the CIT(A) allowed the same in part. It appears that, then, the assessee as well as the Revenue, both carried the matter before the Tribunal by filing separate appeals / cross-objections. The Tribunal, after hearing the parties, allowed the appeals / cross objections in part. Hence, the present appeal. 3. At the time of admitting this Tax Appeal, following questions of law were framed by this Court; (i) Whether, in the facts and circumstances of the case, the ITAT was right in law in holding that the alleged income from Advance License Benefit Receivable ( ALBR for short) is taxable in the year under consideration even though the said income has accrued to the appellant in the subsequent years? (ii) Whether, in the facts and circumstances of the case, the ITAT was right in law in holding that the alleged income from Pass Book scheme is taxable in the year under consideration even though the said income has accrued to the appellant in the subsequent years ? (iii) Whether, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. Mr. Mehta, learned Advocate for the respondent-Revenue, does not dispute the aforesaid aspect. Hence, we answer question Nos. 1 and 2 in favour of the assessee and against the Revenue. 8. Mr. Soparkar, then, submitted that so far as question No.3 framed in this Tax Appeal is concerned, same is covered by the observations made by this Court in Para-4 of Tax Appeal No. 344 of 2002, which reads as under; 4. Insofar as question no.(iii) is concerned, the issue is already concluded by the decision of Apex Court in the case of Deputy Commissioner of Income-tax v. Sun Pharmaceuticals Ind. Ltd., [2010] 329 ITR 479 (Guj). In that case, the Appellate Tribunal found that the land in question was not acquired by the assessee. It was held that merely because the deed was registered, the transaction in question would not assume a different character. The lease rent was very nominal and by obtaining the land on lease, the capital structure of the assessee did not undergo any change. It was further held that the assessee only acquired a facility to carry on business profitably by paying nominal lease rent and that the lease rent paid by the assessee to GIDC was allowabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IB. 14. In view of this judgment of the Apex Court, Mr. Soparkar, fairly conceded that the question has to be answered in the affirmative and against the assessee and in favour of the Revenue. 15. Mr. Mehta, relies upon the aforesaid judgment of the Apex Court and submits that the view taken by the Tribunal be confirmed. 16. Having examined the facts, we are of the view that question No.6 is squarely covered by the judgment of the Apex Court in the case of LIBERTY INDIA VS. CIT (Supra), therefore, same requires to be answered in favour of the Revenue and against the assessee. 17. Mr. Mehta is unable to show any judgment of the Apex Court, taking a contrary view than the one taken by the Apex Court in LIBERTY INDIA VS. CIT (Supra), and therefore, issue No.6 is answered in favour of the assessee and against the revenue. 18. Mr. Soparkar submitted that question No.7 raised in this appeal shall be governed by Para-6 of the decision of this Court in Tax Appeal No. 344 of 2002; which reads as under; 6. Insofar as question no.(v) is concerned, the issue is already concluded by the decision of the Apex Court in the case of ACG Associated Capsules Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y incurred expenditure to earn dividend income, the Revenue has no basis to reduce the amount of dividend, which would qualify for deduction under Section 80M of the Act. The various High Courts, as referred to herein above, has taken the same view. Respectfully, following the aforesaid judgments of different High Courts, we answer question No.8 in negative and in favour of the assessee by holding that when no expenditure are shown to have been incurred by the assessee for earning gross dividend income, deduction under Section 80M of the Act cannot be curtailed to reduce the amount qualifying for claim of deduction under Section 80M of the Act by assuming the amount of expenditure, which is assumed to have incurred by the assessee. Hence, question No.8 is answered in favour of the assessee and against the Revenue, accordingly. 23. To sum up, the question Nos. 1, 2, 3, 7 and 8 framed in this appeal are answered in FAVOUR of the assessee and AGAINST the Revenue, whereas, question No.5 and 6, herein, are answered in FAVOUR of the Revenue and AGAINST the assessee. 24. In the result, this appeal stands PARTLY ALLOWED. The order of the Tribunal, Dated : 03.10.2002, stands MODIFIED ..... X X X X Extracts X X X X X X X X Extracts X X X X
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