2012 (6) TMI 156 - AT - Income Tax

Deduction/s 80IB - Exclusion of DEPB benefit - this issue is now settled against the assessee by the decision of the Hon ble jurisdictional High Court in the case of Commissioner of Income-tax v. Kalpataru Colours and Chemicals reported in (2010 -TMI - 76895 - BOMBAY HIGH COURT) - Decided against the assessee Regarding capitalization of trademark related expenses - ld AR of the assessee has pointed out that though this issue was considered by the Tribunal in assessee s own case for the AY 2004-05 and 2006-07; however, during the year under consideration, apart from the expenditure on registration of trademark, the assessee has also incurred the expenses regarding legal fee, processing fee for renewal of the existing trademark - the expenditure incurred, which is common for the year under consideration as well as in the AY 2006-07, the same is disallowed As regards the expenditure on renewal of the trademark is concerned, the same is required to be examined and if found that any part of the expenditure has been incurred by the assessee for renewal of the existing trademark or in connection with the existing trademark, then the same shall be allowed - Held that Assessing Officer is directed to verify and decide this issue, after giving reasonable opportunity of being heard to the assessee

Summary

Issues:
1. Exclusion of DEPB benefit for deduction u/s 80IB.
2. Disallowance u/s 80IA in respect of profit of windmills.
3. Capitalization of software expenses.
4. Capitalization of trademark related expenses.
5. Disallowance u/s 14A r.w.r 8D.

Issue 1: Exclusion of DEPB benefit for deduction u/s 80IB:
The Appellate Tribunal noted that the issue was settled against the assessee by previous court decisions. The Tribunal cited judgments from the Hon'ble jurisdictional High Court and the Supreme Court, which led to the decision being made against the assessee regarding the exclusion of DEPB benefits for deduction u/s 80IB.

Issue 2: Disallowance u/s 80IA in respect of profit of windmills:
The Tribunal referred to a previous order in the assessee's own case for AY 2006-07 and upheld the decision against the assessee. The Tribunal analyzed the specifics of the case, highlighting the differences from previous judgments and ultimately decided the issue against the assessee.

Issue 3: Capitalization of software expenses:
The Tribunal set aside the issue to the file of the Assessing Officer for a fresh decision based on a previous Special Bench order. The Tribunal directed the Assessing Officer to decide on the deductibility of software expenses following the parameters laid down in the Special Bench order.

Issue 4: Capitalization of trademark related expenses:
The Tribunal considered the arguments presented by both parties regarding trademark-related expenses. It referred to a previous order in the assessee's case for AY 2006-07 and partially allowed the ground for statistical purposes. The Tribunal directed the Assessing Officer to examine and decide on the expenditure related to trademark renewal.

Issue 5: Disallowance u/s 14A r.w.r 8D:
Since Rule 8D was applicable only prospectively from Assessment Year 2008-09, the Tribunal restored the issue to the file of the Assessing Officer for fresh adjudication. The Tribunal directed the Assessing Officer to reexamine the matter in light of the latest decision of the Hon'ble Jurisdictional High Court and in accordance with the law.

In conclusion, the appeal filed by the assessee was partly allowed for statistical purposes, with different issues being decided against the assessee based on legal precedents and specific case details.