TaxTMI 
TaxTMI 
2018 (7) TMI 1461
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....lief OR deduction in the proceedings u/s 153A of the IT Act. 2) The CIT (Appeals) has erred in holding that the provisions of Section 153A of the IT Act are for the benefit of Revenue and not for the benefit of tax payers. Such conclusions are opposed to the provisions contained in Section 153A of the IT Act. 3) It is contended that the sum of Rs. 8,44,18,024/- representing sublicense fees pertains to the Corporate Unit. The findings of lower authorities that such sub-licensing income of Rs. 8,44,18,024/- pertains to Baddi Unit is opposed to evidences on record. 4) The lower authorities have erred in holding that the depreciation of Rs. 15,00,000/- on technical know-how acquired pertains to and is referable to Baddi Unit. Such finding....
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....edi vide Agreement dated 21st July 2003. As per clause No. 2.2 of the Agreement, the appellant was permitted sub-license know-how and technical knowledge to other parties in India or abroad as per prior consent and consideration for this right to license. Later on, vide Supplementary Agreement dated 25th July 2003, Mr. Ashok Chaturvedi permitted the appellant to sublicense such technical know-how to other parties subject to a minimum payment of Rs. 25 lakhs per month. Thereafter, the appellant shared such technical know-how with other parties, i.e. M/s Flex Industries Ltd., NOIDA and M/s Golden Dirham, UAE. During the year under consideration, the Assessing Officer, while computing the deduction u/s 80-IB/80-IC of the IT Act, observed....
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....the Income-tax Act, 1961 [hereinafter referred to as 'the Act'. was filed on 31.10.2004 which was revised on 31.03.2006. A search action u/s 132 of the Act took place on 23.2.2006 which means that on the date of search, the revised return filed on 31.03.2006 did not attain finality as the time limit for taking the return for scrutiny assessment u/s 143(2) of the Act was available with the AO. 5. Pursuant to the notice u/s 153A of the Act, the assessee filed its return of income. The assessee declared income of Rs. 6,76,43,647/-. 6. While scrutinising the return of income, the AO noticed that the original return filed u/s 139 of the Act on 31.10.2004 was at NIL income after claiming deduction u/s 80IC of the Act amounting to Rs. 9,....
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.... documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant t....
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....clusion of income received on account of licence fees from the deduction earlier claimed u/s 80IC of the Act along with the exclusion of the expenditure claimed on account of foreign exchange fluctuation loss, tours and travelling expenses, deprecation as intangible assets and administrative expenses. 12. Facts relating to this issue relates to the Memorandum of Agreement between Shri Ashok Chaturvedi and the assessee made on 21/07/2003 which is exhibited at pages 92 to 97 of the paper book wherein it has been mentioned that Shri Ashok Chaturvedi has gained substantial extensive experience in manufacturing of flexible packaging and its related activities and is developing /inventing new technical know-how pertaining to product and is willi....
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.... income from sub-licencing fee from the claim of deduction u/s 80IC of the Act, but dismissed the claim of royalty expenditure as appropriated by the assessee. 15. In our understanding of the facts, as discussed hereinabove, we are of the considered opinion that the assessee is very much entitled to deduction of the expenses which have direct nexus with earning of sub licence fees meaning thereby that the assessee is entitled for exclusion of income from licencing of technical know how not on the gross basis but on net basis after adjusting royalty expenses which have direct nexus with the income from sub licence fees. 16. A perusal of the assessment order shows that the AO did not allow claim of netting off of sub licence fees because th....