Dy. CIT v. Tyco Valves & Control India (P.) Ltd.

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The Tax Publishers2013 TaxPub(DT) 0398 (Ahd-Trib) : (2013) 151 TTJ 0207 : (2013) 081 DTR 0048 INCOME TAX ACT, 1961 --Deduction under section 10B--100 per cent export oriented undertaking Condition precedent not allegedly satisfied--assessing officer disallowed the claim of assessee-company under section 10B observing that Chennai unit had more than 20 per cent of the value of the plant and machinery consisting of old machinery used earlier for the production purposes, i.e., under section 10B industrial unit should not be formed by the transfer of previously used machinery. *Held:* Was not justified, as the conditions prescribed in the section were not satisfied in the year of commencement of production, assessee would not be able to claim such deduction in the subsequent years. Section 10B therefore does not give any indication that in each year of claim its eligibility should be newly established; because the relevance of the phrase 'newly established undertaking' was only to identify initial year of period for which assessee was eligible for claim of exemption. Thus in the absence of any disturbance in respect of relief granted in initial year, there was no legal justification to disturb the continuous deduction of section 10B in any of the subsequent assessment years. Also assessing officer had wrongly presumed that the transaction in question was a purchase of machinery by Chennai unit as Tribunal had given a clear cut finding that lease rentals were received by M/s Sakhi Raimondi, the rejection of deduction under section 10B was bad in law. Income Tax Act, 1961, Section 10B INCOME TAX ACT, 1961 --Deduction under section 80HHC--Business profit Interest income--assessing officer was justified in holding that interest income was not to be included in total turnover for computation of deduction under section 80HHC as interest on deposits with banks was not to be treated as business income but treated as income from other sources. Income Tax Act, 1961, Section 80HHC INCOME TAX ACT, 1961 --Appeal [Commissioner (Appeals)]Evidence assessing officer had not found payment of commission to be bogus--Commissioner (Appeals) had stated that after going through the details of commission agents and details of TDS payments, list of parties giving the description of documents, voucher numbers, date of payment, their PANs, amount of invoices, rate of commission, etc., details of debit notes and commission paid in case of assessee, he was satisfied that the payment of commission was not a bogus payment and, therefore without any investigation assessing officer had wrongly disallowed claim. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0398 (Ahd-Trib) : (2013) 151 TTJ 0207 : (2013) 081 DTR 0048

INCOME TAX ACT, 1961

--Deduction under section 10B--100 per cent export oriented undertaking Condition precedent not allegedly satisfied--assessing officer disallowed the claim of assessee-company under section 10B observing that Chennai unit had more than 20 per cent of the value of the plant and machinery consisting of old machinery used earlier for the production purposes, i.e., under section 10B industrial unit should not be formed by the transfer of previously used machinery. Held: Was not justified, as the conditions prescribed in the section were not satisfied in the year of commencement of production, assessee would not be able to claim such deduction in the subsequent years. Section 10B therefore does not give any indication that in each year of claim its eligibility should be newly established; because the relevance of the phrase 'newly established undertaking' was only to identify initial year of period for which assessee was eligible for claim of exemption. Thus in the absence of any disturbance in respect of relief granted in initial year, there was no legal justification to disturb the continuous deduction of section 10B in any of the subsequent assessment years. Also assessing officer had wrongly presumed that the transaction in question was a purchase of machinery by Chennai unit as Tribunal had given a clear cut finding that lease rentals were received by M/s Sakhi Raimondi, the rejection of deduction under section 10B was bad in law.

Income Tax Act, 1961, Section 10B

INCOME TAX ACT, 1961

--Deduction under section 80HHC--Business profit Interest income--assessing officer was justified in holding that interest income was not to be included in total turnover for computation of deduction under section 80HHC as interest on deposits with banks was not to be treated as business income but treated as income from other sources.

Income Tax Act, 1961, Section 80HHC

INCOME TAX ACT, 1961

--Appeal [Commissioner (Appeals)]Evidence assessing officer had not found payment of commission to be bogus--Commissioner (Appeals) had stated that after going through the details of commission agents and details of TDS payments, list of parties giving the description of documents, voucher numbers, date of payment, their PANs, amount of invoices, rate of commission, etc., details of debit notes and commission paid in case of assessee, he was satisfied that the payment of commission was not a bogus payment and, therefore without any investigation assessing officer had wrongly disallowed claim.