Case Law Details
Uni-Design Jewellery Pvt. Ltd Vs DCIT (ITAT Mumbai)
Appellant had contended that Design Charges recovered are nothing but recovery of cost incurred by the Appellant. We note that on 11.03.2005 Unit-II of the Appellant had raised Debit Note for USD 30,000/- on Cavrois UNI-D SA towards product development, designing, and model making expenses incurred by the Appellant for developing designs. Thereafter on 25.05.2005, inward remittance of USD 30,000/-was received by the Appellant as per credit advise issued by the banker. The aforesaid income by way of Design Charges has been earned by Unit-II the undertaking of the Appellant eligible for deduction under Section 10A of the Act. In view of the aforesaid, we do not find merit in the contention of the Revenue that the Appellant has not been able to show that the Design Charges are not related to export of jewellery.
In view of the above, we hold that the Appellant has been able to establish that income by way of Design Charges are in the nature of business income as the same are inherently connected with the business of export of jewellery undertaken by Unit-II of the Appellant, and therefore, the same must be included in business income for the purpose of computing deduction under Section 10A of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
By way of the present appeal the Appellant has challenged the order, dated 25.05.2021, passed by the Ld. Commissioner of Income Tax (Appeals)-58, Mumbai [hereinafter referred to as „the CIT(A)’] for the Assessment Year 2005-06, whereby the Ld. CIT(A) had partly allowed the appeal against the Assessment Order, dated 30.12.2008 passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as „the Act’).
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