The Tax Publishers2019 TaxPub(DT) 2369 (Bang-Trib) : (2019) 071 ITR (Trib) 0539

INCOME TAX ACT, 1961

Section 10B

Where AO denied deduction under section 10B as regards revenue of assessee's functional genomics division, matter was remanded back to AO for a proper, thorough and comprehensive examination of the facts related to functions and activities of assessee's Functional Genomics Division and also examine the form, nature and content of deliverables of said division and to then decide allowability of assessee's claim for deduction under section 10B.

Deduction under section 10B - Allowability - Profits from functional genomics division of assessee - No proper examination of facts on AO's part

Assessee a company was engaged in carrying out R & D functional genomics, bioinformatics and chemistry and also trading in biotechnology tools and instruments manufactured by its AE abroad. It claimed deduction under section 10B on the revenue of Functional Genomics Division. AO denied deduction on the ground that basic activity of assessee was Research & Development in the field of Functional Genomics and no activity was undertaken by the assessee of manufacuring and export of any article or thing or computer software, nor its activity did come under notified ITES. Held: Basic form and content of deliverables given by the assessee to its AE required examination on the facts of the matter in the light of the recitals of the Research and Development Services Agreement entered into between assessee and its AE. Such an examination had not been carried out by AO. Thus, it was appropriate to remand the issue back to AO for a proper, thorough and comprehensive examination of the facts related to functions and activities of assessee's Functional Genomics Division and also examine the form, nature and content of deliverables of said division and to then decide allowability of assessee's claim for deduction under section 10B.

REFERRED :

FAVOUR : In assessee's favour (by way of remand).

A.Y. : 2008-09


INCOME TAX ACT, 1961

Section 10A

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