AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 1899
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....hakar Rao in detail and perused paper books placed on record covering each of the issues. 3. Grounds No. 1, 13 and 14 are general in nature which does not require any adjudication. 4. Grounds No. 2 and 3 pertains to inclusion of capital gain of Rs. 4,64,92,152/- on sale of property at Bangalore which assessee claims that it has already been included by the A.O. while computing the long term capital gain for A.Y. 2005-2006. It is the contention that same item of income cannot be taxed in two different assessment years. The facts leading to the present issue are that the assessee sold properties of 'B1' in Bangalore in favour of Akshay Developers and a part of the land was transferred in the financial year relevant for A.Y. 2005-2006 and an....
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....aimed exemption. Based on the orders in A.Y. 2005-2006, A.O. made the same addition of Rs. 10 lakhs as expenditure incurred for earning exempt income. Learned Counsel submitted that this issue was decided by the ITAT in A.Y. 2004-2005 and the amount of disallowance of Rs. 3 lakhs confirmed by CIT(A) was deleted in full by the ITAT. Reference was made to paras 5 to 7 of order in ITA.1364/H/08 dated 18.12.2009. It was further submitted that up to and including A.Y. 2003-2004, no disallowance was made under section 14A towards any alleged expenses for earning dividend income. 8. Learned D.R. however, relied on the orders of the Assessing Officer. 9. We have considered the issue and perused the orders of the ITAT in earlier years. Major disal....
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....s on the issue of disallowance of royalty amount of Rs. 2,76,58,080/- paid by the assessee to Gulf Oil International (Maritius) Inc. (In short "GOIMI"). 11. It was submitted that assessee has entered into an agreement with GOIMI on 01.08.2003 for payment of royalty on entire turnover of lubricants including domestic and export sales at 5.5% (net of taxes). When the assessee sought approval of the Government of India, the Ministry of Petroleum and Gas gave its NOC vide letter dated 03rd October, 2003 suggesting changes relating to rate of royalty and period of royalty. Accordingly, supplementary agreement was entered on 10.11.2003 making royalty payable at internal sales at 5% and export sales at 8% (net of taxes) and the royalty was payabl....
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.... of royalty on export sales in excess of 1% and the remaining amount was fully allowed. 14. Learned Counsel placed the facts of the later years and has submitted that on domestic sales there is no disallowance in later years and accordingly, the commission paid on domestic sales in this year amounting to Rs. 2,14,28,108/- is allowable. Coming to the export sales claim of Rs. 62,29,972/-, it was submitted that entire royalty should be allowed and not merely restricted to 1% for the following reasons - (a) the percentage of payment of royalty by third parties to other hubs is more than what was paid by the assessee/appellant to GOIMI. (b) percentage of payment of royalty by other subsidiaries to other hubs is more than what was paid by ....
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....8/- as per the working furnished ed by assessee at para 24 in page 7 of the paper book volume-2. Therefore, out of the amount of Rs. 62,29,972/- Assessing Officer is directed to allow royalty at Rs. 18,05,788/- and balance amount of Rs. 44,24,184/- stands disallowed. 17. Learned Counsel relied on the decision of the Coordinate Bench in the case of Kinetic Motor Ltd. Vs. JCIT 77 ITD 393 to submit that once the agreement was approved by the Government of India, no disallowance is required to be made. We have perused the said decision and noticed that the assessment year involved was A.Y. 1995-1996 and royalty claim was allowed by the A.O. in the immediate preceding year i.e., A.Y. 1994-1995. Accordingly, the ITAT held that though the princip....