TaxTMI 
TaxTMI 
2013 (11) TMI 823
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....within the meaning of section 80IA of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case, the CIT(A) erred in law and on facts in holding that the trading of equipments is inextricably linked to the business of its telecommunication services. 3. On the facts and in the circumstances of the case, the CIT(A) erred in law and on facts in holding that income of Rs. 26,79,780/- from space is eligible for deduction u/s 80IA of the Income Tax Act 1961. 4. On the facts and in the circumstances of the case, the CIT(A) erred in law and on facts in holding that INSAT 2E is a domestic satellite within the meaning of sub clause (ii) of clause (4) of Section 80IA of the Income Tax Act 1961, despite the fact that Briti....
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.... assessee's own case for A.Y. 2005-06, granting deduction u/s 80IA. The order of CIT(A) in allowing assessee's claim being in consonance with ITAT order for A.Y. 2005-06, the revenue's appeal on these grounds is liable to be dismissed. 4. Ld. DR on the other hand relied on the assessment order. 5. We have heard rival contentions and gone through the entire material available on record. In respect of income from sale of VSAT equipment the ITAT in para 11 of its order dated 31-3-2010 for A.Y. 2005-06 (supra) has allowed deduction u/s 80IA on sale of VSAT equipments by observing as under: "Let us have a look on the nature of equipments. We have perused pages number 29-40 of the paper book. On page 29-31 the copy of the import license ....
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....e order of the CIT(A) being in consonance with ITAT order for A.Y. 2005-06, we see no reason to interfere with the order of CIT(A) in allowing deduction u/s 80IA on sale of VSAT equipments. In view of above ground nos. 1 & 2 are dismissed. 6. Regarding income from space segment amounting to Rs. 26,79,780/-, the ITAT in 15 to 19 of its order dated 31-3-2010 for A.Y. 2005-06 (supra) has upheld the order of CIT(A), allowing deduction u/s 80IA on income earned from space segment charges paid by holding that the payment made by the assessee is not to any foreign company which was owner of a satellite or operating the satellite in terms of section 80IA(4)(ii). In operative para 19 the ITAT has observed as under: "19. We have duly considered....
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....eceived on the investment of Rs. 80 lacs which is an old investment and further the appellant is having its own funds of more than 24 crores which goes on to show that there are no financial expenses incurred for making such investment. In vie of the above facts & following the decisions cited by the appellant including the case of Hero Cycles (supra) the disallowance made for Rs. 2,61,541/- is directed to be deleted and the appeal is allowed." 7.1. We have heard rival contentions on the issue in question. The Hon'ble Bombay High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. 234 CTR (Bom) 1, has, inter alia, observed as under: "v) The provisions of Rule 8D of the Income tax Rules which have been notified with effect from ....