TaxTMI 
TaxTMI 
2024 (9) TMI 1738
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.... for hearing on merits. First of all, we will take up ITA No.362/Chny/2024 preferred by the assessee. 3. Ground No.1 is general in nature, so dismissed. 4. Ground No.2 is regarding disallowance of claim of weighted deduction on R&D expenditure to the tune of Rs.23,13,53,553/-, since expenditure was not approved by DSIR. It is noted that similar ground has already been allowed by this Tribunal for AY 2010-11 in the assessee's own case in ITA No.361/Chny/2024 by holding as under: 3.3 We have heard both the parties and perused the material available on record. We note that the assessee has 3 in-house R&D facilities for undertaking scientific research duly approved by DSIR as an in-house R&D centre per requirement of section 35(2AB). Deduction claimed for these approved R&D centers was duly audited and certified by statutory auditors in annual report. DSIR is merely authority for approval of R&D facility. Once facility is approved, expenditure incurred automatically qualifies for deduction u/s.35(2AB), irrespective of DSIR approval. It is noted that the R & D Facility has been approved as required by the authority i.e. DSIR. The settled position was that once facility....
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....6,668/-. 5. Respectfully following the order of the Tribunal in assessee's own case (supra) on the same reasons mutatis mutandis, we allow this ground of appeal and direct the AO to allow weighted deduction on R&D expenditure to the tune of Rs.23,13,53,553/-. 6. Ground No.3 is regarding disallowance of deduction for forex loss accounted in hedge reserve to the tune of Rs.1,63,39,984/-. The AO has disallowed the deduction claimed by the assessee by holding as under: "it is evident that the underlying forecasted transaction has not occurred during the year and therefore the income or expense relating to the forecasted transaction has not been claimed by the assessee in the profit and loss account. As per Section 37, any expense which has been incurred during the year only can be claimed. Since the assessee has not claimed any expenses relating to the underlying transaction, the loss arising out of forward contract in relation to the said expenses also cannot be allowed. Further, the assessee's reliance on the decision of the Hon'ble Apex Court in the case of Woodward Governor will not be applicable in the assessve's case, since the court has held that the l....
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....AY 2009- 10 and 2010-11. In the return of income for AY 2009-10, the Appellant claimed this amount as a deduction in the memo of income as the loss had occurred on account of restatement of forex liability on account of the forward contracts in that year by placing reliance on the Supreme Court decision in CIT vs. Woodward Governor India P Limited [2009] 312 ITR 254 (SC)/For AY 2010-11, when the underlying transaction such as import of raw materials actually crystallize, the hedge reserve is reversed and the loss is debited to Profit and Loss account. Though this amount was claimed as a deduction in for AY 2009-10, the debit to P&L was in AY 2010-11. In order to avoid double deduction, the debit to P&L in AY 2010-11 was nullified by the Appellant by adding back the amount of loss in the memo of income for AY 2010-11 However, the claim of deduction for AY 2009-10 was not allowed by the AO and confirmed by the CIT(A) and is pending before the ITAT. If the claim of deduction made in memo of AY 2009-10 is not allowed, the Appellant's adding back of the amount in AY 2010-11 will effectively result in denying this loss of forex changes on account of revenue item. Therefore, in order ....
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.... this issue is allowed in favour of the assessee. 9. In the result, appeal filed by the assessee in ITA No.362/Chny/2024 for AY 2011-12 stands partly allowed. ITA No.484/Chny/2024 - Department appeal 10. Ground No.2 is regarding disallowance of depreciation and maintenance cost of aircrafts. 10.1 We note that the very same issue had been considered while adjudicating Ground No.2 of the Revenue appeal for AY 2010-11 [ITA No.482/Chny/2024] and on the same reasons mutatis mutandis, we set aside this issue back to the file of the JAO for verification and passing of orders on similar lines as that of AY 2007-08 & 2008-09 of Tribunal order dated 23.09.2016 after hearing the assessee. 11. Ground No.3 of the Revenue is regarding depreciation in the assessee's own case on the issue on UPS @60% instead of 15% granted by the AO. This issue had already been considered by us in the Revenue's appeal for AY 2010-11 (supra) and we upheld the action of the Ld.CIT(A) allowing the depreciation @60% since it is a part of the computer accessories and therefore, we dismiss this ground of the Revenue. 12. Ground No.4 of the Revenue appeal is regarding disallowance of consultancy expendi....
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.... 1 Pinsent Masons, LLP UK Legal services Article 15-Independent personal services since, services are provided from outside India and the personnel of the vendor firm have not stayed in India more than 90 days. Alternatively, even under Article 13- Royalties & FTS, fees does not 'make available' any technical know-how/skill 2 QAIS Insights Pte Ltd. Singapore Customer Satisfaction Index (CSI) study Article-13 - Royalties & FTS, fees does not 'make available' any technical know-how/skill 3 M.S.Krishnan US Fees for SAP consultancy Article 15-Independent personal services since, services are provided from outside India and the personnel of the vendor firm have not stayed in India more than 90 days. Alternatively, even under Article 12 - Royalties & Fees for Included Services, fees does not 'make available' any technical knowhow/skill 12.5 We note that the AO disallowed consultancy expenditure of Rs.1,54,53,119/- u/s.40(a)(i) of the Act for non-deduction of TDS. It is noted that assessee has made payment of legal fees and consultancy fees to individuals in UK & USA, on which, assessee hasn't deducted tax at source ....