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2016 (5) TMI 1014 - ITAT MUMBAI

2016 (5) TMI 1014 - ITAT MUMBAI - TMI - Deduction u/s 80HHE - Held that:- Since the assessee has maintained separate books of accounts, in our considered view, there is no need, as per law, to aggregate accounts of all the businesses for computing amount of deduction allowable u/s 80HHE. Since all the amounts required for computing deduction u/s 80HHE i.e. profit of the export business (i.e. eligible business), its export turnover and its total turnover are separately available, therefore, the d .....

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have been correctly computed by the assessee. Thus, for the limited purpose of verification of these facts, this issue is sent back to the file of the AO for which adequate opportunity of hearing shall be provided to the assessee. The assessee is free to raise all legal and factual issues before the AO. The AO shall pass the order afresh after taking into account all the details and evidences as may be brought on record by the assessee.

License paid for Logistics Tracking Software (L .....

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ecording by the assessee in its books of accounts. The income has to be assessed and expenses are to be allowed under the income tax proceedings in view of the provisions of Income Tax Act, 1961, as explained by the courts as well as Central Board of Direct Taxes by way of its circulars/ instructions as have been issued time to time. It is well settled law that entries in the books of accounts are not determinative of the character of income or expenses. No case has been made out by the AO that .....

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es were incurred during the year under consideration and pertain to the same year and these have been incurred for the purpose of business of the assessee. Under these circumstances we find no reason to disallow these expenses.

Allowably of deduction of interest - Held that:- This issue as covered in favour of the assessee in view of judgment of Hon’ble Supreme Court in the case of DCIT vs. Core Health Car [2008 (2) TMI 8 - SUPREME COURT OF INDIA ] wherein held An assessee is entitled .....

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NO.5161/Mum/2001, ITA NO.5018/Mum/2001, ITANO.7289/Mum/2002, ITA NO.6540/Mum/2004, ITA NO.194/Mum/2003, ITA NO.6377/Mum/2004, ITANO.193/Mum/2003 - Dated:- 20-4-2016 - Shri C.N. Prasad, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Assessee : Shri Vijay Mehta (AR) For The Revenue : Shri Jasbir Chauhan, CITDR ORDER Per Bench: These appeals pertain to the same assessee involving identical issues, and therefore, these were heard together and being disposed of by these consolida .....

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r s view that deduction u/s 80HHE is not allowable on the basis of separate books of account maintained by the Appellant for Software Export Division. The deduction under section 80HHE therefore merits to be allowed as claimed by the assessee. 3. The solitary issue raised in its appeal by the assessee is with regard to allowing the deduction claimed by the assessee u/s 80HHE of the Act at ₹ 26,74,856/- instead of ₹ 6,65,03,172/- as was claimed by the assessee in the return of income. .....

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all the businesses of the assessee have to be taken as one, irrespective of the fact whether separate books of account for each business is maintained or not, the amount of deduction allowable u/s 80HHE should be computed on the basis of formula which computes the deduction on proportionate basis and accordingly, the AO computed the deduction u/s 80HHE on the basis of following formula: Profit of the Business X Export Turnover / Total Turnover 3.1. Being aggrieved, the assessee filed an appeal b .....

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med the order of the AO by observing as under: I have considered the facts of the case and the arguments of the appellant. The first issue to be decided as to whether separate books of accounts are maintained for two divisions - (i) the normal telecom business and (ii) the software exports, the calculation for the deduction under Section 80 HHE has got to be allowed on the basis of the books of accounts for the software business or on the basis of the formula prescribed/ in Section 80HHE itself. .....

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uction has to be allowed in accordance with the provisions of the Section. Section 80HHE(3) reads as under - "For the purposes of Sub-Section (1), profits derived from the business referred to in the Sub-Section shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on the assessee." The provisions do not mention the maintenance of different books of accounts for different divisions. .....

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ding the interpretation of Section 80HHC of the Income-tax Act and are not in respect of the provisions of Section 80HHE of the Income-tax Act. Though the two Sections are similar and relate to exports but there is a difference in the two Sections. The assessing officer has therefore correctly held that the decisions of the ITAT under Section 80HHC cannot be applied for Section 80HHE. Considering the discussion above, it has to be held that the deduction under Section 80HHE(3) of the Income-tax .....

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lowing cases: i. Morgan Stanley India Securities P. Ltd. Vs. ACIT in ITA No. 5072/Mum/2005 ii. Datamatics Technologies Ltd. Vs. DCIT 3.3. On the other hand, Ld. DR relied upon the orders of the lower authorities. 3.4. We have gone through this issue carefully and find it to be no more res-integra. It is noted that in both of the cases relied upon by the Ld. Counsel, this issue has been analysed in detail. In the case of Morgan Stanley India Securities P. Ltd (supra), the Mumbai Bench of ITAT dec .....

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all the businesses carried on by the assessee, the figure of ₹ 80,46,765/- which forms the basis of the assessee's computation represents only the prof its of the eligible business (back office support services). The task before us is to examine which of the two views is correct. 17. According to us the view canvassed on behal f of the assessee is to be preferred over the view put forth on behalf of the income tax department. As already noted sub-section (3) exists only for the purpose .....

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ds, it is only the profits of the business of back office support services which have to be split in the same proportion as the export turnover in the said business bears to the total turnover in the said business. Explanation (d), which defines the expression "profits of the business" refers to the profits of the business as computed under the head Profits and gains of business". Under the Income Tax Act, having regard to the provisions of Chapter IV read with section 70 and sect .....

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f the business as computed under the head "Profits and gains of business", it means the profits of the eligible business as computed under the aforesaid head. In other words, Explanation (d) does not expand the meaning of the expression "profits of the business" to include profits of all the businesses carried on by the assessee. Having said in sub-section (3) that the profits of the business means the profits of the eligible business referred to in sub-section (1), it is inc .....

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rofits of the business, which means the eligible business, are the profits as computed in the assessment order under the head "Profits and gains of business". It has possibly been enacted to clarify or explain that the profits of the eligible business is not what the books of account of the assessee show and it can only be what the assessment order shows. It is also significant that sub-section (3) as well as Explanation (d) refer only to 'prof its of the business" and not the .....

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- 35. It is the case of the assessee that assessee company is exporting the computer software manufactured in SEEPZ unit. Assessee is keeping separate account. The entire activity of the assessee in this zone is independent from assessee other business. There is no overlapping and mingling of the services or any link between the manufacturing activities of both. Both are exclusive of each other. 36. As rightly contended by the learned counsel, section 80HHC speaks of deduction in respect of pro .....

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om export of computer sof twar e e tc . For the reasons s tated hereinabove, we al low the claim of the assessee on this ground." In coming to the above conclusion the Tribunal has referred to two judgments of the Madras High Court, in the case of CIT vs. Rathore Brothers (2002) 254 ITR 656 (Mad) and in the case of CIT vs. Madras Motors/M M Forgings Ltd. (2002) 257 ITR 60 (Mad). These two judgments were concerned with section 80HHC of the Act. However, there was similarity between section 8 .....

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to the provisions of section 80HHE also. 19. The result of the above discussion is that the departmental authorities were not correct in taking the profits of the eligible business at 15,42,52,035/-. They ought to have taken the figure at 80,46,765/- as contended for by the assessee, which figure represents the profits of the back office support services, which in other words are the profits of the eligible business. 3.5. Similarly in the case of Datamatics Technologies Ltd. (ITA No.5557/Mum/201 .....

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of the provision suggests. However, such a course is fraught with serious aberrations, leading to deduction being allowed on non- eligible profits on one hand, and being denied on the eligible profit, on the other. This is in view of non segregation of the profits on the basis of activity, or even broadly, i.e., on the basis of trading and manufacturing sectors, which we find to have been the legislative response in respect of the para materia provision of s. 80- HHC by Finance Act, 1990 and Fi .....

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intent of according the benefit there-under only to the profits from the specified, qualifying activity. Accordingly, it is only the profits of the assessee s computer software business, christened as the eligible business , that would stand to be apportioned u/s.80-HHE(3). As a natural corollary, it is only the total turnover of such eligible business that would stand to be taken in the denominator figure, with the export turnover having been already defined to be the qualifying export turnover .....

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not considered those decisions, thus, may be drawn. We decide accordingly. 3.6. We have gone through the aforesaid judgments and facts of this case, and respectfully following these judgments, we principally uphold the claim of the assessee. Since the assessee has maintained separate books of accounts, in our considered view, there is no need, as per law, to aggregate accounts of all the businesses for computing amount of deduction allowable u/s 80HHE. Since all the amounts required for computin .....

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urnover and total turnover; therefore, principally accepting the claim of the assessee, we send this issue back to the file of the AO to find out whether these amounts have been correctly computed by the assessee. Thus, for the limited purpose of verification of these facts, this issue is sent back to the file of the AO for which adequate opportunity of hearing shall be provided to the assessee. The assessee is free to raise all legal and factual issues before the AO. The AO shall pass the order .....

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disallowance of ₹ 15,92,74,120/- being licence fees paid for logistics tracking software (LTS) treating the same as revenue expenses" 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the disallowance of ₹ 3,79,64,689/- on account of deferred revenue expenditure." 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the A.O. to allow the deduction of interest amounting to ₹ 2 .....

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o section 80HHE of the I.T. Act 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the A.O. not to exclude the miscellaneous income from the business profits and not to include the same in the total turnover of the assessee. The Ld. CIT(A) has further erred directing the A.O. to exclude the dividend income from the- total turnover of the business. In addition to the above, the revenue has filed following additional grounds: i) On the facts and in t .....

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u/s.40(a)(i) due to its failure to deduct and pay tax u/s.195 & 195A of the I.T. Act. In any case, the amount was not allowed as an expenditure on the premise that no tax was deducted and paid as per the provisions of section 195 r.w.s. 195A of the I.T. Act, and failure to do so has resulted in operation of provisions of section 40(a)(i) of the I.T. Act, which over ride all other provisions. iii) The Ld. CIT(A) erred in rejecting the AO's alternate finding that the expenditure on acquisi .....

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ion of software was in the nature of fee for technical services and is liable for deduction of TDS, as per provisions of section 195, 195A of the I.T. Act, 1961, which the assessee failed to do. Further, the Ld. CIT(A) did not accept that this expenditure was not allowable in view of section 40(a)(i) of I.T. Act 1961. 5. During the course of hearing, it was submitted by the Ld. DR that additional grounds are purely legal grounds and these were omitted to be taken at the time of filing of the app .....

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stice and fair play, these are admitted. 8. During the course of hearing, Ld. DR mentioned that additional grounds no. (i) is not pressed. Therefore, the same is dismissed. 9. Ground Nos.1 (of the main Grounds) and Ground nos. (ii), (iii) & (iv) of the Additional grounds: These grounds address the common issue of correct treatment of amount of ₹ 15,92,74,120/-, being the license paid for Logistics Tracking Software (LTS) which was disallowed by the AO by treating the same as capital ex .....

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uring the year under consideration, the assessee had entered into an agreement with M/s GElS International Inc, a U.S. company. According to the agreement, the assessee was a licensee of certain software relating to the logistics tracking of cargo. The U.S. Company had granted the licence to the assessee for a consideration of 4 million U.S. dollars. The licence to use the software was only for use in India. The Assessee had the right to use the software and make further developments, which coul .....

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nt of copyright by the U.S. Company within the meaning of Section 2(47) of the Income Tax Act. The Assessing Officer also held that the copyright over the software was not registered in India, as it was not located in India and therefore section 9(1) of the Income-tax Act was not attracted. The assessing officer then examined as to whether Sections 9, 35A and 35AB of the Income-tax Act were attracted with reference to Article 12 of the DTAA between India and the U.S.A. The assessing officer exam .....

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(l)(vi) of the Income-tax Act. The assessing officer further held that the rights in computer software are intellectual rights. The assessing officer further held that the definition of royalty in the Act covers all payments for the transfer of all or any rights in copyrights, literary, artistic or scientific work or other industrial property. In his view, royalties also included consideration for services connected with licensing rights and knowhow and imparting of information concerning techni .....

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C.I.T. 172 ITR 520 (Cal) & h) C.I.T. v Davy Ashmore India Ltd. 190 ITR 626. 9.3. The assessing officer also relied on the ratio laid down in the case of Peerless Consultancy Pvt. Ltd. 164 CTR 194 (SC), wherein it was held that processing of data amounts to processing of goods and is manufacturing activity and therefore the assessee was an industrial company. The assessing officer also relied on the decision of the I.T.A.T., Mumbai in the case of Tangerine Exports 49 ITD 386 wherein it was h .....

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, the agreement gave an enduring benefit to the assessee and therefore the expenditure was capital in nature. To support this view, the assessing officer relied on the decisions of the ITAT in the cases of Telecom Ind. Co. Pvt. Ltd. 45 ITD 203 (Mad), Comp. Field Services Pvt. Ltd. 159 CTR 220 (Mad). The assessing officer then held that the assessee was an industrial company. The assessing officer held that the claim of the assessee cannot be considered for deduction under Sections 35A and 35AB o .....

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e came to the conclusion that the expenditure was capital in nature. The assessing officer then examined the ratio laid down in the case of Kirioskar Cummins Ltd. 202 ITR 36 (Bom) and held that the said decision was not applicable to the assessee's case because the software purchased by the assessee was not for the assessee's existing business but was for a new business because the production of software was not the business of the assessee. The assessing officer then relied on the ratio .....

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c Motors Ltd. 237 ITR 280 (Guj). The assessing officer held that the software acquired could be used for producing further software and that the software was not likely to become obsolete. In his view therefore, the decision in the case of Business Information Processing Services 239 ITR (AT) 19 would not apply as in that case the software was held to be a revenue expenditure as it was likely to become obsolete very fast. The software acquired by the assessee was downloaded from the internet. Th .....

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. CIT(A) wherein detailed submissions were made, challenging that impugned expenses were revenue in nature and that the same did not fall within the definition of royalty u/s 9(1)(vi) of the Act and no tax was required to be deducted at source on the said payment. The Ld. CIT(A) partly accepted the submissions of the assessee and deleting the addition he allowed the appeal. Being aggrieved, the revenue has filed an appeal wherein it has taken ground no.1 as part of main grounds and three more ad .....

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rix of the case and correct position of law in this regard. We find it appropriate to reproduce the relevant portions of the findings of the Ld. CIT(A) as under: I have considered the facts of the case. The appellant was in the business of software. In order to increase its competitiveness and to give better facilities to its customers, the appellant purchased LTS software from GEIS, a US company. The question is whether this expenditure would be capital expenditure or revenue expenditure. The a .....

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ture was a capital expenditure. But in this case nothing of the sort has happened. The software has given a new edge to the business of the appellant and has also increased the efficiency of the appellant. The assessing officer has mainly relied that the purchase of the software has led to giving an enduring benefit to the appellant. The concept of enduring benefit is not the only criteria to be seen. The issue to be examined is as to whether any asset was brought in to existence. In fact in the .....

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ficiency of production. The Supreme Court held that as new product was manufactured the expenditure laid out had to be treated as revenue expenditure. Therefore, considering these two landmark judgments of the Supreme Court are has to be held that the expenditure incurred for the purchase of software is revenue expenditure in the hands of the appellant. 10.2. It is noted by us that Ld. CIT(A) has carefully analysed the facts of this case and applied the judgments of the Supreme Court correctly. .....

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contended that the impugned expenditure was in the nature of royalty as defined in section 9(1)(vi) as well as Article 12 of Indo-US DTAA and therefore, assessee was liable to deduct tax at source on the impugned payment made to the non-resident, and since assessee failed to deduct tax at source the impugned expenditure was liable to be disallowed u/s 40(a)(i) of the Act. It has also been alternatively, contended by the Revenue that the impugned expenditure was in the nature of Fee for Technica .....

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support of the additional grounds: (i) Viacom 18 Media Pvt. Ltd. vs. ADIT 153 ITD 384 (Mumbai), (ii) DDIT vs. Reliance Infocom Ltd. 37 CCH 69 (ITAT Mumbai), (iii) Verizon Communications Singapore Pte. Ltd. vs ITO 361 ITR 575 (Madras), (iii)CIT vs Samsung Electronics Co. Ltd., 345 ITR 494 (Karnataka) (iv)CIT vs Synopsis International Old Ltd.212 Taxmann 454. Ld. DR vehemently argued that ratio of these judgments need to be analysed and applied on the facts of this before this issue can be conclu .....

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US treaty, wherein the words used are different from the words used in the provisions of section 9(1)(vi). It has been submitted that qua Indian Territory, the said software has been purchased by the assessee company and thus it can be said to be owned by the assessee, and therefore, it amounts to alienation of rights and not for the use of rights in the software. In other words, consideration paid by the assessee is not for the use of rights but for purchase of property and rights therein. In .....

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tax at source on the amount of royalty paid by it. Under these circumstances, no discrimination should be done with the non-resident assessee s by creating obligation to deduct tax at source on the amount of royalty, in view of specific provisions of para 3 of Article 26 of the Treaty, and for this purpose reliance has been placed on the judgment of the Delhi Bench of ITAT reported in Herbal Life International India (P) Ltd. vs ACIT 101 ITD 450 and Millennium Infocom Technologies Ltd. Vs. ACIT .....

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these judgments various contentions have been analysed and discussed in context of different factual situations. It is further noted by us that various contentions raised by both the parties now before us were not analysed by the Ld. CIT(A) while deciding this issue. Ld. CIT(A) had held that the impugned payments did not fall within definition of royalty and the assessee was not required to deduct tax at source on the impugned payment. It is noted that the various contentions raised before us h .....

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ssee is free to take all legal and factual issues before the Ld. CIT(A). The Ld. CIT(A) shall decide these issues afresh. 12. As a result Ground No. 1 of main grounds is dismissed and Ground nos. (ii) (iii) & (iv) of the additional grounds are sent back to the file of the Ld. CIT(A) for fresh adjudication and may be treated as partly allowed for statistical purposes. 13. Ground No.2 (main Grounds): In this ground, the revenue has challenged the action of Ld. CIT(A) in deleting the disallowan .....

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d revenue expenses. This was done in accordance with the Accounting Standard laid down by the Institute of Chartered Accountants of India. But in the income tax return, the assessee claimed the expenses in its entirety. It was argued before the assessing officer that the expenses were allowable under Section 37 and should be allowed. The assessing officer relied on the decision in the case of Madras Industrial Investment Co. Ltd. 25 ITR 802 (SC). In that case the company had issued debentures at .....

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as allowable on a deferred revenue basis. He therefore disallowed the entire claim of ₹ 3,79,64,689/-. 13.2. Being aggrieved, the assessee filed an appeal before the Ld. CIT(A) wherein detailed submissions were made and it was contended that in fact these expenses were purely revenue in nature expenses but in the books of accounts these were claimed as deferred revenue. The Ld. CIT(A) considered the submissions of the assessee and analysed the nature of expenses and held that these expense .....

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y allowed the same and therefore his order should be upheld and ground raised by the revenue should be dismissed. 13.5. We have gone through orders of the lower authorities, submissions made before us as well as judgment of Hon ble Supreme Court relied upon by the Ld. Counsel. It is noted that the Ld. CIT(A) has analysed the details of expenses and reproduced the same in his order at page no.17, which is reproduced hereunder: During the course of appeal , the detai ls of the expenses of ₹ .....

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n its books of accounts. The income has to be assessed and expenses are to be allowed under the income tax proceedings in view of the provisions of Income Tax Act, 1961, as explained by the courts as well as Central Board of Direct Taxes by way of its circulars/ instructions as have been issued time to time. It is well settled law that entries in the books of accounts are not determinative of the character of income or expenses. No case has been made out by the AO that these expenses are capital .....

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e year under consideration and pertain to the same year and these have been incurred for the purpose of business of the assessee. Under these circumstances we find no reason to disallow these expenses. Our view finds support from the judgment of Hon ble Supreme Court in the case of Taparia Tools Ltd. (supra) as well as various other judgments which have been referred to by the Ld. CIT(A) in its order. For the sake of ready reference, relevant portion of the order of the Ld. CIT(A) is reproduced .....

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penses. It was therefore argued that the expenditure should be allowed in full. In this case reliance was placed in the case of Madras Auto Service (P) Ltd. 233 ITR 468 (SC). Reliance was also placed on the ratio laid down in the case of Sutlej Cotton Mills Ltd. 116 ITR 1, C.Parakh &Co.(India) Ltd. 29 ITR 661 (SC). In both these cases, the Supreme Court has held that entries made in the books of accounts are not determinative of the income to be assessed. A similar view was expressed by the .....

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. The arguments of the appellant are correct. Entries in the books of accounts are not determinative of the character of income and expenses. The claim of the appellant is correct as such expenses were of revenue in nature. The assessing officer is therefore dir d to delete a sum of ₹ 3,79,64,689/- from the total income of the appellant. 13.7. In view of detailed discussion made by us and findings of Ld. CIT(A), we find nothing wrong in the order of Ld. CIT(A) and therefore, we uphold the .....

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enditure of the assessee's business. In its return of income, the assessee had claimed the amount as a deduction under Section 36(1)(iii) of the Income-tax Act. The assessing officer relied on the decision of the Calcutta Bench of ITAT in the case of JCIT Ltd 65 ITD 169. The Tribunal had held that the established principles of accountancy is that interest on borrowed funds was required to be capitalised to the cost of the assets which were purchased out of the borrowed funds. The assessing o .....

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borrowing has to be added to the cost of the assets if the purchase of the assets are from the borrowed funds. In his view, there was no basis to hold that the provisions of Section 36(1)(iii) overrule the provisions of Section 43(1) of the Income-tax Act. He therefore did not accept the claim of the assessee for the deduction of interest. 14.2. Being aggrieved, the assessee filed appeal before the Ld. CIT(A), wherein detailed submissions were made. It was submitted that the assessee had raised .....

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whether it would be part of business expense. After considering submissions of the assessee, Ld. CIT(A) found force in it and therefore, directed to allow the deduction of interest claimed by the assessee. 14.3. Being aggrieved, the revenue has filed an appeal before the Tribunal. During the course of hearing Ld. DR relied upon the order of the AO. On the other hand, Ld. Counsel of the assessee stated this issue as covered in favour of the assessee in view of judgment of Hon ble Supreme Court i .....

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is reproduced below: Section 36(1)(iii) of the Income-tax Act, 1961, has to be read on own terms: it is a code by itself. It makes no distinction between money borrowed to acquire a capital asset or a revenue asset. All that the section requires is that the assessee must borrow capital and the purpose of the borrowing must be for business which is carried on by the assessee in the year of account. Unlike section 37 which expressly excludes an expense of a capital nature, section 36(1)(iii) emph .....

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ssessee has borrowed. "Actual cost" of an asset has no relevancy in relation to section 36(1)(iii). The proviso inserted in section 36(1)(iii) by the Finance Act, 2003, with effect from April 1, 2004, will operate prospectively. Held accordingly, that the assessee was entitled to deduction under section 36(1)(iii) prior to its amendment by the Finance Act, 2003, in relation to money borrowed for purchase of machinery even thou h the assessee had not used the machinery in the year of bo .....

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on the borrowings for the new unit could be allowed against the income of the existing unit. The Tribunal allowed the claim of the appellant after analysing a number of decisions of different High Courts and the Supreme Court. The facts of the appellant are similar to that case. Though the borrowings were for the purpose of the expansion the interest on the borrowing would have to be allowed as a deduction from the total income. The assessing- officer was therefore directed to allow the deducti .....

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expenses holding the same as non-business expenses. 15.1. It is noted that total expenses claimed under this head were to the tune of ₹ 3,48,01,847/- Under this amount, a sum of ₹ 75,77,669/- has been claimed as miscellaneous expenses. The AO held that complete bills and other documents of these expenses were not available and therefore, he disallowed 5% of the total expenses on estimate and ad hoc basis. 15.2. It was contended before Ld. CIT(A) that further details were never asked .....

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. 16. Ground Nos. 5 & 6: These grounds were raised challenging manner of computation of deduction u/s 80HHE. It was contended that in case ground raised in assessee s appeal on deduction under section 80HHE was allowed, then these grounds would become infructuous. 16.1. We have allowed the ground of the assessee in principle, but remitted the matter back for the limited purpose for verification of facts. In view of the same, we find it appropriate to send these grounds back to the file of th .....

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by the Assessing Officer in view of the findings given in the appeal u/s. 163 order dated 22.102002; and 2.holding that the license fee received by GEIS is a business income because it is a transfer of copy righted article rather than the copy right itself as against the view of the Assessing Officer that the amount is taxable in India as 'royalty' under Article 12 of the DTAA between India and USA." 18. In this case, the addition was made in the hands of the assessee on account of .....

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ired and permitted under the law. Under these circumstances these appeals may be treated as allowed for statistical purposes. Now we shall take up assessee s appeal No.7289/Mum/2002 for A.Y. 1998-99: The assessee has filed appeal on following grounds: 1. holding that the ground relating to charging interest u/s 234B and 234C of the IT Act, 1961 (vide point no.4 of the order) becomes infructuous and only of academic discussion and is allowed only for statistical purposes. 2. not adjudicating the .....

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377; 2,43,68,941 ignoring the fact that where a person is treated as a representative of a non-resident after the financial year is over, he cannot retrospectively be burdened with liability u/s 234A and 234B of any past financial year (vide Point No.6.2). The CIT (A) dismissed the ground as infructuous. 19. It is noted that we have remitted the appeal pertaining to assessment of the assessee in the representative capacity back to the file of Ld. CIT(A) vide our order in ITA No. 193 & 194/Mu .....

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ort division for export of computer software for which separate books of accounts are maintained, and therefore deduction U/s 80HHE was correctly claimed by the appellant on the basis of profits of the software export division. 2.On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in ignoring that section 80HHE allows deduction specifically for export of computer software, and hence appellant is eligible for deduction on the basis of appellant's software export d .....

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, the CIT (A) has erred in excluding following items of miscellaneous income from business profit while computing deduction U/s 80HHE of the Act:- a. Sale of papers/cartons/scrap ₹ 9,245/- b. Waiver of hire purchase liability on account of premature repayment of the principal amount towards purchase of computer equipment etc. ₹ 18,998,887/- c. Training charges for provision of training facilities in software etc. ₹ 3,29,699/- d. Rent from MTNL for use of space ₹ 37,166/- .....

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back to the file of the AO vide our order in ITA No.5161/Mum/2001 above. Therefore, we find it appropriate to send these grounds also back to the file of the AO to be decided afresh after giving adequate opportunity of hearing. Thus, this appeal may be treated as allowed for statistical purposes. Now we shall take up revenue s appeal in ITA No.6377/Mum/2004 for A.Y. 1999-00 21. The Revenue has filed appeal on the following grounds: 1. On the facts and in the circumstances of the case and in law, .....

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