TMI Blog2007 (9) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... income. We may also add here that the decision of the Third Member in the case of Wimco Seedings Ltd. vs. DCIT [ 2006 (12) TMI 65 - ITAT, DELHI] in the absence of any decision of the Special Bench in Maruti Udyog Ltd. [ 2004 (10) TMI 278 - ITAT DELHI-A] to the contrary has a binding force as that of a Special Bench as laid down by the Special Bench of the Tribunal in the case of DCIT vs. Padam Prakash,[ 2006 (9) TMI 222 - ITAT DELHI-E] . Thus, we uphold the order of the CIT (Appeals) and dismiss the first ground of appeal of the Revenue. Addition on account of common expenses - HELD THAT:- Similar disallowance was made by the assessing officer and the Tribunal had an occasion to deal with the same and in I.T. Appeal for assessment year 1999-2000, The Tribunal deleted the similar addition made by the assessing officer. The Tribunal found that there were no common expenses attributable to the software unit, which were incurred or met by the head office and consequently no disallowance of expenses could be made in the head office account. In the present assessment year the assessing officer has merely followed the order in assessment year 1999-2000. The facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits derived by the undertaking from the export of computer software. The assessing officer rejected the claim of the assessee holding that the interest income derived by the assessee cannot be treated as profits derived from the business of export of computer software. The assessing officer followed his own order in assessment year 1999-2000 wherein similar treatment was given to the interest income. 2.3 On appeal by the assessee, the CIT (Appeals) confirmed the order passed by the assessing officer. 2.4 Before us it is not in dispute that similar issue had arisen for consideration in assessee's own case for the assessment year 1999-2000 and this Tribunal in I.T. Appeal Nos. 1513 and 2379 (Del) of 2003 has held that interest income cannot be considered as part of the profits and gains derived from the business of export of computer software. This Tribunal has referred to the decision of the Hon'ble Supreme Court in the case of CIT vs. Sterling Foods 237 ITR 579 (SC) and ultimately concluded that interest income cannot form part of the income eligible for deduction under section 10-A of the Act. In view of the above, first ground of appeal of the assessee, is dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1513 and 2379 (Del) of 2003 this Tribunal on identical issue had sustained an ad-hoc addition of ₹ 5,000/- out of the disallowance of ₹ 50,000/- made by the assessing officer. It was further pointed out that in assessment year 1998-99 in I.T. Appeal No. 2948 (Del) of 2002 [order passed later in point of time to the earlier order], this Tribunal had taken the view that the disallowance cannot be made by the assessing officer without pointing out the items of expenses, which were incurred in earning the income, which was not chargeable to tax. The Tribunal in this regard had relied on the decision of the Delhi Bench of the Tribunal in the case of Maruti Udyog Ltd. 92 ITD 119 (Del) Thus, there is a conflict of views on this issue expressed by the two benches. We, however, notice that a Third Member decision of the Delhi Bench of the Tribunal in the case of Wimco Seedings Ltd. vs. DCIT(2007) 107 ITD 267 (Del.) [T.M.] had taken the following view :- On the construction of section 14A, I am inclined to agree with the ld. J.M. that only expenditure which has been proved to have been incurred in relation to the earning of tax free income, can be disallowed and the secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other units. 5.3 On appeal by the assessee, the CIT (Appeals) deleted the addition made by the assessing officer. Hence, the aforesaid ground of appeal by the Revenue before the Tribunal. 5.4 It may also be mentioned here that in assessment year 1999-2000 also, similar disallowance was made by the assessing officer and the Tribunal had an occasion to deal with the same and in I.T. Appeal Nos. 1513 and 2379 (Del) of 2003 for assessment year 1999-2000, The Tribunal deleted the similar addition made by the assessing officer. The Tribunal found that there were no common expenses attributable to the software unit, which were incurred or met by the head office and consequently no disallowance of expenses could be made in the head office account. In the present assessment year the assessing officer has merely followed the order in assessment year 1999-2000. The facts and circumstances being identical, we are of the view that the CIT (Appeals) was justified in deleting the addition made by the assessing officer. Consequently, ground No. 2 raised by the Revenue, is dismissed. 6.1 The third ground of appeal of the Revenue, reads as follows :- 3. On the facts and in the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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