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TMI Blog2017 (6) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration as under: "Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal was justified in law in holding that the deduction under section 35AB in case of the assessee in respect of the payment for knowhow during the assessment year 1999- 2000 was available though the manufacturing activity for which such knowhow was acquired, had not commenced? 2. Short facts are as under: Respondent-assessee is a company registered under the Companies Act and is engaged in number of activities. In the case on hand, the business of the assessee, which was ongoing business since long, was of manufacturing soaps. During the period relevant to the assessment year 1999-2000, the assesseecompany had expended certain amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Revenue has filed the present appeal. Learned counsel for the Revenue submitted that sub section (1) of section 35AB grants exemption on lumpsum payment made by the assessee by way of consideration for acquiring knowhow for the use for the purpose of his business and such deduction would be from the profits and gains of the business for that previous year. His emphasis was, therefore, that the deduction can be claimed only from the profit and gain of the business for which, the technical knowhow is acquired. 5. Learned advocate Mr. Soparkar in addition to opposing this contention, pointed out that the setting up of soda ash factory by the assessee is considered to be extension of existing business of manufacturing soap. Contrary c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for earning income liable to be excluded? 7. Whether the Appellate Tribunal is right in law and on facts restoring the issue back to AO to decide for granting benefits of netting to the Assessee and further directing the AO to allow expenses after verifying nexus with income of Rs. 57,40,830/- out of sale gunny bags, bardans for the purpose of deduction under Section 80I, 80IA & 80HH of the Act for Kanpur Division of the assessee as not derived from and industrial undertaking and further directing that net income should be excluded from the business profit for the purpose of allowing deductions under section 80I, 80IA & 80HH of the Act for netting purpose without considering the facts that such expenses were incurred from the business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earning income liable to be excluded? 10. Whether the Appellate Tribunal is right in law and on facts in confirming the order of the CIT(A) to recalculate interest expenditure of Rs. 82,98,93,839/- in respect of Mandali Division, Rs. 9,25,330/- in respect of Trikampura Divison, Rs. 40,38,063/- in respect of Kanpur Division and Rs. 4,75,178/- in respect of Indore Division from the interest income while working out the deduction u/s. 80I, 80IA and 80HH of the Act and further directing the Assessing Officer to allow netting, if the Assessee is able to establish the nexus between interest expenditure and interest income?" 7. It can thus be seen that the Court confirmed the decision of the Tribunal that the setting up of the manufacturing fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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