The machinery which was purchased by the assessee in the course of expansion of new Project was installed in the year 1996-97 relevant to the Asst. Year 1997-98. There is nothing on record to suggest that the assessee had put the machinery to use during the Asst. Year 1998-99. It appears that the assessee had claimed 100% depreciation as the project was completely abandoned later in the year 1999. Since the machinery was never put to use by the assessee no depreciation is allowable for the Asst. Year 1998-99.
In the instant case, the interest is payable in respect of amounts deposited by financial institutions with the assessee by subscribing to the bonds issued by the assessee. The interest is payable in respect of certain deposits received by the assessee and not in respect of any loans, advances or borrowings made by the assessee. For the same reason, clause (e) of section 43B relating to loans and advances from a scheduled bank is also not applicable in the instant case.
By no stretch of imagination, Lakme can be considered as dominant either in the geographical market of Delhi or of Gurgaon. There are innumerable branded and non-branded saloons exclusively for women in Delhi alone looking at the population of Delhi being 1.26 crore and the same is the situation with regard to the number of exclusive saloons for women within district Gurgaon which covers a large area within it.In view of the presence of such a large number of beauty saloons exclusively for women in these areas having 7 saloons or so would not give a dominant status to Lakme under any circumstance. Thus, the question of abuse of dominance by Lakme would not arise.
In the present case no material has been produced by the appellant/assessee to show that the admission made by him was incorrect in any way. On the other hand, it is the assessee who is insisting that it is for the department to corroborate the statement of admission made by him and until and unless the department corroborates the same, the statement cannot be relied upon. Admission once made can certainly be retracted, if the circumstances permit, and it can also be shown to have been made under some mistake or to be otherwise incorrect.
Mere characterisation of an account as a NPA would not by itself be sufficient to say that there is uncertainty as regards realizability of income or interest income thereon. Accrual of interest is a matter of fact to be decided separately for each case on the basis of examination of the facts and circumstances. The same would require an assessment of the relevant facts and circumstances of each case. Only by assessment of facts and circumstances, the Authority could arrive at a decision whether there is uncertainity of the interest accrued on NPA. Only when there is uncertainity of realizability of income or interest income then it is not chargeable to tax.
Ld. Counsel of the assessee submitted that that even if any freight, telecommunication or insurance expense during the year, are reduced from the export turnover, such sums will also have to be reduced from the total turnover of the company for the purpose of computation of deduction u/s. 10A.
Exemption claimed by the assessee under S.54 of the Act cannot be denied on the ground that the assessee has not utilised the sale consideration received from the sale of flats itself, in purchasing the plot. Law is well settled by the judicial precedents that investment in purchase of pot for construction of house would entitle an assessee to claim exemption u/s.54 or 54F of the Act. Board’s circular No.667 dated 18.10.1993 also says so.
In the instant case, the assessee although an extended arm of State Government formed as a society to carry out charitable activities in the nature of ‘general public utility’ is in fact providing assistance to industrial houses and entrepreneurs for setting up of industry in the State of Tamil Nadu. The assessee facilitates in providing licence, approval and permission from various Government agencies for setting up of industry in the State, for which it is charging fee. The fee charged by the assessee is not remitted to the Government treasury or exchequer. After insertion of proviso to section 2(15) of the Act, the assessee has lost its character of charitable organization. The assessee is a service provider.
Before a pharmaceutical drug could be put in the market, the regulatory authorities would insist on strict tests and research on all possible aspects, such as possible reactions, effect of the drug and so on. Extensive clinical trials, therefore, would be an intrinsic part of development of any such new pharmaceutical drug. It cannot be imagined that such clinical trial can be carried out only in the laboratory of the pharmaceutical company.
When the specific provision under Section 80HHE is concerned about technical services rendered in connection with software development, we do not approve of the line of reasoning of the Tribunal. One cannot read any such choice available to the assessee for claiming deduction either under Section 80-O or under Section 80HHE of the Income Tax Act. In the face of the finding of the Officer as to the nature of technical services rendered as in connection with the development of production of computer software as spoken to by the company’s Director, we do not find any good ground to accept the assessee’s plea. In view of the above, the order of the Tribunal stands set aside and these appeals, filed by the revenue, stand allowed. There will be no order as to costs.
