IT: Commissioner (Appeals) has to give convincing reasoning while upholding order of Assessing Officer
IT: Where assessee did not continue as small scale industrial undertaking during assessment year under consideration, it was not entitled to claim deduction under section 80-IB
IT: Where depreciation and loss prior to initial year had already been set off against other business income of respective years, there was no need for notionally carrying forward and setting off of same depreciation and loss in computing deduction under section 80-I
IT: Benefit of weighted deduction on in-house Research and Development expenditure is allowed only from year in which assessee has made application and entered into an agreement with Department of Science and Industrial Research
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[2014] 51 taxmann.com 245 (Pune - Trib.)
IN THE ITAT PUNE BENCH 'A'
Advik Hi tech (P.) Ltd.
v.
Additional Commissioner of Income-tax, Range-8, Pune*
SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER
AND R.K. PANDA, ACCOUNTANT MEMBER
IT APPEAL NOS. 1743 & 1744, 1706 & 2041 (PN.) OF 2012
[ASSESSMENT YEARS 2008-09 & 2009-10]
JULY 30, 2014
I. Section 28(i), read with section 45 of the Income-tax Act, 1961 - Business income - Chargeable as (Business income v. Capital gains - Share transactions) - Assessment year 2008-09 - Assessee Company engaged in manufacturing of auto components earned a profit from purchase and sale of shares and showed same as short-term capital gain - Assessing Officer treated same as business income and Commissioner (Appeals) confirmed same - Whether in view of assessee's own case for assessment year 2007-08 wherein identical issue was pending disposal, matter was to be restored to file of Commissioner (Appeals) for fresh adjudication - Held, yes [Para 2.3] [Matter remanded]
II. Section 80-IB of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings other than infrastructure development undertakings (Small scale industrial undertaking) - Assessment year 2008-09 - Whether in order to claim deduction under section 80-IB(3)(ii), eligibility of being SSI unit continues for entire period of claim and not only in initial assessment year - Held, yes - Whether, therefore, Commissioner (Appeals) was justified in rejecting assessee's claim for deduction under section 80-IB where assessee did not qualify to be a small scale industrial undertaking in previous year relevant to year under consideration as value of its plant and machinery exceeded Rs. 3 crores - Held, yes [Para 5.2] [In favour of revenue]
III. Section 80-IA of the Income-tax Act, 1961 - Deductions - Profit and gain from infrastructure undertakings (Computation of deduction) - Assessment year 2008-09 - Assessee claimed deduction under section 80-IA(4)(iv)(a) not in year in which power generation commence but in a later year - Whether as per section 80-IA(2), assessee has option to exercise choosing of initial assessment year out of fifteen years beginning with year in which its undertaking starts production - Held, yes - Whether deduction under section 80-IA(4)(iv)(a) was to be allowed without deducting brought forward loss or unabsorbed depreciation prior to initial year on notional basis where depreciation and loss of those years had already been set off against other business income of those years - Held, yes [Para 9.2] [In favour of assessee]
IV. Section 35 of the Income-tax Act, 1961 - Scientific research expenditure - Assessment year 2009-10 (Approval by DSIR) - Assessee claimed weighted deduction under section 35(2AB) which also pertained to revenue expenses incurred on in-house research and development in return of income for assessment year 2009-10 - Whether since approval under section 35(2AB) had been accorded to R & D unit of assessee-company from 1-4-2009 to 31-3-2012, assessee was entitled to claim weighted deduction under section 35(2AB) from assessment years 2010-11 and not 2009-10 as claimed by assessee - Held, yes [Paras 13.3 & 13.4] [in favour of revenue]
V. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (TDS) - Assessment year 2008-09 - Assessing Officer disallowed claim of Rs. 1.53 lakhs noticing that it pertained to TDS paid in respect of technical know-how fees payable to collaborators which had not been paid and hence could not be said to be business expenses of assessee - Commissioner (Appeals) had not given cogent reasoning while upholding order of Assessing Officer and had merely stated that amount in question being TDS could not be said to be business expenditure of assessee company and, therefore, same could not be allowed - Whether matter was to be restored to file of Commissioner (Appeals) for decision afresh - Held, yes [Para 3.1] [Matter remanded]
IT: Where assessee did not continue as small scale industrial undertaking during assessment year under consideration, it was not entitled to claim deduction under section 80-IB
IT: Where depreciation and loss prior to initial year had already been set off against other business income of respective years, there was no need for notionally carrying forward and setting off of same depreciation and loss in computing deduction under section 80-I
IT: Benefit of weighted deduction on in-house Research and Development expenditure is allowed only from year in which assessee has made application and entered into an agreement with Department of Science and Industrial Research
■■■
[2014] 51 taxmann.com 245 (Pune - Trib.)
IN THE ITAT PUNE BENCH 'A'
Advik Hi tech (P.) Ltd.
v.
Additional Commissioner of Income-tax, Range-8, Pune*
SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER
AND R.K. PANDA, ACCOUNTANT MEMBER
IT APPEAL NOS. 1743 & 1744, 1706 & 2041 (PN.) OF 2012
[ASSESSMENT YEARS 2008-09 & 2009-10]
JULY 30, 2014
I. Section 28(i), read with section 45 of the Income-tax Act, 1961 - Business income - Chargeable as (Business income v. Capital gains - Share transactions) - Assessment year 2008-09 - Assessee Company engaged in manufacturing of auto components earned a profit from purchase and sale of shares and showed same as short-term capital gain - Assessing Officer treated same as business income and Commissioner (Appeals) confirmed same - Whether in view of assessee's own case for assessment year 2007-08 wherein identical issue was pending disposal, matter was to be restored to file of Commissioner (Appeals) for fresh adjudication - Held, yes [Para 2.3] [Matter remanded]
II. Section 80-IB of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings other than infrastructure development undertakings (Small scale industrial undertaking) - Assessment year 2008-09 - Whether in order to claim deduction under section 80-IB(3)(ii), eligibility of being SSI unit continues for entire period of claim and not only in initial assessment year - Held, yes - Whether, therefore, Commissioner (Appeals) was justified in rejecting assessee's claim for deduction under section 80-IB where assessee did not qualify to be a small scale industrial undertaking in previous year relevant to year under consideration as value of its plant and machinery exceeded Rs. 3 crores - Held, yes [Para 5.2] [In favour of revenue]
III. Section 80-IA of the Income-tax Act, 1961 - Deductions - Profit and gain from infrastructure undertakings (Computation of deduction) - Assessment year 2008-09 - Assessee claimed deduction under section 80-IA(4)(iv)(a) not in year in which power generation commence but in a later year - Whether as per section 80-IA(2), assessee has option to exercise choosing of initial assessment year out of fifteen years beginning with year in which its undertaking starts production - Held, yes - Whether deduction under section 80-IA(4)(iv)(a) was to be allowed without deducting brought forward loss or unabsorbed depreciation prior to initial year on notional basis where depreciation and loss of those years had already been set off against other business income of those years - Held, yes [Para 9.2] [In favour of assessee]
IV. Section 35 of the Income-tax Act, 1961 - Scientific research expenditure - Assessment year 2009-10 (Approval by DSIR) - Assessee claimed weighted deduction under section 35(2AB) which also pertained to revenue expenses incurred on in-house research and development in return of income for assessment year 2009-10 - Whether since approval under section 35(2AB) had been accorded to R & D unit of assessee-company from 1-4-2009 to 31-3-2012, assessee was entitled to claim weighted deduction under section 35(2AB) from assessment years 2010-11 and not 2009-10 as claimed by assessee - Held, yes [Paras 13.3 & 13.4] [in favour of revenue]
V. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (TDS) - Assessment year 2008-09 - Assessing Officer disallowed claim of Rs. 1.53 lakhs noticing that it pertained to TDS paid in respect of technical know-how fees payable to collaborators which had not been paid and hence could not be said to be business expenses of assessee - Commissioner (Appeals) had not given cogent reasoning while upholding order of Assessing Officer and had merely stated that amount in question being TDS could not be said to be business expenditure of assessee company and, therefore, same could not be allowed - Whether matter was to be restored to file of Commissioner (Appeals) for decision afresh - Held, yes [Para 3.1] [Matter remanded]
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