It is undisputed fact that the appellant is an undertaking and is engaged in the manufacturing of article specified in Fourteenth schedule and in a specified category of states for which it is eligible for deduction u/s.80IC. Such an exemption has been allowed in the earlier years by the Assessing 0fficer himself i.e. for the Assessment Year 2005-06 and 2006-07. Sub-section 3 of section 80IC categorically provides that the deduction would be available for 100% of such profits and gains for 10 assessment years if the profits and gains have been derived from such business activities.
We find that it is clear from letter dated 19-12-2009 that assessee has explained the position regarding liabilities in respect of three parties and even confirmation of M/s Surekha Overseas was filed. This reply clearly shows that the liabilities were still outstanding. Therefore, in our opinion, ld. CIT(A) has rightly held that since the liabilities are still outstanding, the provisions of sec.41[1] are not attracted.
On Appeal ITAT held that that the letting out of terrace has to be assessed under the head Income From House Property as against Income From Other Sources assessed by the Assessing Officer and also allow deduction provided under section 24 of the Act.
In regard to jewellery found on person and in the bedroom of Smt. S.H. Khorakiwala, it was stated before the Assessing Officer that the same was received at the time of her marriage. The Assessing Officer accepted the confirmation of mother but the confirmation of NRI gifts from relatives was not accepted. He observed that whether they had purchased the jewellery abroad and gifted to Smt. Samina H. Khorakiwala in which case the customs clearance receipt should have been filed.
Now, we take-up the appeals for the A.Y. 2006-07 and 2007-08. The only common issue in both the appeals is in respect of deduction u/s.10A which was denied by the A.O. on the reason that the assessee company is formed by splitting and reconstruction of the existing business/undertaking.
The Ld. Counsel submits that company has been paying the Directors remuneration as a profit commission as per the provisions of the Companies Act, 1956, after determination of the profits. The assessee-company also is performance incentives to the Managers. He submitted that Mr. S. Rao was Chairman & Managing Director of the assessee company who withdrew from the active participation of the company’s business and Mr. Anil S. Rao was paid a commission of Rs.81,39,200/- @ 8% of the profit which as per the resolution passed by the Board. We have also heard Ld. D.R. We find that the profit commission which is paid to the Director is approved in the general meeting (G.M.) of the shareholders and required evidence was filed before the Ld. CIT (A).
ITAT held that profits from participation of cargo under ‘Slot Arrangement’ are not eligible for benefit of Article 8 of the India-Germany tax treaty (the tax treaty) in case the mother vessels are not owned, hired or chartered by the taxpayer.
It is pertinent to note that the term ‘insurer’ has not been used in sec. 10(10D) and as it is clear that as per provisions of sec. 10(10D) any sum received under Life Insurance Policy including the benefit on such policy is eligible for the deduction. Therefore, it is apparent that there was no intention of the legislature to restrict the benefit of exemption/s 10(10D) only on the insurance policy taken from Indian Insurance Company.
AR invited our attention to the observations of the revenue authorities, wherein, they had observed that the ATMs were just cash dispenser and projector and not a computer aided peripheral. The A.R. has placed certain photographs alongwith short descriptions as to how the ATM functions. From the short descriptions, it can be seen that ATM functions entirely through the functions of a computer.
In our considered opinion, the Assessing Officer has to consider the composite transaction. The first appellate authority was wrong in his finding on applicability of explanation to section 43(5). Thus, we vacate this finding.
