TMI Blog2020 (2) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of royalty - allowable revenue expenditure - HELD THAT:- The above issue is squarely covered in favour of the assessee by the decision of the Hon'ble Delhi High Court [ 2017 (5) TMI 469 - DELHI HIGH COURT] wherein, the appeal filed by the revenue against the order of the coordinate bench for Assessment Year 2007-08 to 2009-10 has not been admitted. The coordinate bench in that order has held that the expenditure of royalty and technical guidance fees is revenue in nature. Taxing the interest income as profit of the business for computation of deduction u/s 80HHC - HELD THAT:- It is undisputed that the assessee has eared interest income on fixed deposit has not been challenged as being taxed under the head income from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.988/Del/2016, ITA No.1056/Del/2016 - - - Dated:- 3-2-2020 - Sh.Sudhanshu Srivastava, Judicial Member And Sh. Prashant Maharishi, Accountant Member Appellant by Sh. Neeraj Kumar Jain, Advocate Ms. Shaily Gupta, CA Respondent by Sh. S. K. Jain CIT DR ORDER Prashant Maharishi, 1. These are the cross appeals filed by the assessee and revenue against the order of the ld CIT(A)-44, New Delhi dated 06.10.2015 for Assessment Year 2004-05. 2. The assessee has raised the following grounds of appeal:- 1. That on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) (' CIT(A) ) erred in upholding the action of the assessing officer in excluding interest income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 979/- on account of disallowance of royalty? 3. Whether on the facts and circumstances of the case, Ld. CIT(A) was correct in deleting the addition of ₹ 2,50,349/- on account of disallowance of technical guidance fee? 4. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 4. Brief facts of the case shows that the assessee is a company engaged in the business of manufacturing portable generators sets, IC Engines, water pumping sets and manufacture and processing of pressure diecasting parts. It files its return of income on 29.10.2004 at ₹ 8,55,38,347/-. The assessment u/s 143(3) of the Act was made on 26.12.2006 determining total income of the assessee at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us. 8. We have heard the rival parties. The above issue is squarely covered in favour of the assessee by the decision of the coordinate bench in assessee‟s own case for Assessment Year 1995-96, 1997-98, 2000-01 and 2001-02 onwards wherein, the coordinate bench has directed the ld AO to not to consider the sales tax and excise duty in total turnover for computing the deduction u/s 80HHC of the Act. Further, the above issue is also squarely covered in favour of the assessee by the decision of the Hon'ble Supreme Court in CIT Vs. Laxmi Machine Works 209 ITR 667. In the result ground No. 1 of the appeal is dismissed. 9. Ground no. 2 relates to the additions of ₹ 76,04,979 /- on account of disallowance of royalty. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged it before the ld CIT(A). The ld CIT(A) vide para 6.3(d) decided the issue against the assessee. 13. The assessee submits that it seeks direction from ITAT to set off the interest income and such net interest income should be excluded from the business income eligible for deduction u/s 80HHC of the Act. The assessee submits that it has paid interest of ₹ 41,18,141/-. The assessee also referred to the decision of the Hon'ble Delhi High Court in 289 ITR 475. 14. The ld DR also submitted that interest income on FDR derived form Bank deposit cannot be netted off by the interest income related to the business. It was further stated that assessee does not challenge that above income us not income from other sources but a bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that the assessee has submitted that it has not incurred any expenditure for earning the dividend income. The ld AO rejected above contention and computed disallowance by estimating 25% of the above expenditure as disallowable u/s 14A of the Act. The assessee challenged the same before the ld CIT(A). The ld CIT(A) vide para No. 8 dealt with the issue and confirmed the above addition. 17. The ld AR challenged the same stating that when the assessee has submitted that it has not incurred any expenditure for earning of exempt income, ld AO may record a satisfaction having regard to the books of account and then prove that the explanation of the assessee is false/ incorrect. In the present case, no such satisfaction has been recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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