The expenditure incurred by the assessee on leased premises, cannot be treated as capital expenditure and has to be allowed as Revenue expenditure.
The finding of the Tribunal that 12.5% of net ad revenues is arms length price, was not challenged by the Revenue, we uphold the findings of the first appellate authority.
Money received from a holding company with whom the assessee does not have any trading or business transaction cannot be considered as trading receipt. When there is no contractual agreement or a right to receive, the amount is not taxable as income. Applying these principles to the facts of the case, we have no hesitation in upholding the finding of the CIT(A) that the gift in question cannot be considered as income. Coming to the entries in the books of account, it is well settled that entries in the books of account do not determine the tax ability or otherwise of a receipt.
Such receipts which do not form part of export turnover cannot be included in the total turnover for the purpose of computation of relief under section 80HHC.
IN THE INCOME TAX APPELLATE TRIBUNAL
“L” Bench, Mumbai
Before Shri J. Sudhakar Reddy, Accountant Member
and Shri R.S. Padvekar, Judicial Member
ITA No. 6775/Mum/2004
(Assessment Year: 2001- 02)
