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TMI Blog2007 (12) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... countries in convertible foreign exchange amounting to Rs. 19,33,583. The claim of the assessee was denied by the Assessing Officer on the ground that the provisions of section 80-O effective from assessment year 1998-99, does not permit the assessee, deduction under section 80-O inasmuch as the word fee had been omitted from the said section. At this stage, it be mentioned that there is not much discussion in the assessment order for the assessment year 1998-99. However, in the assessment order for the assessment year 2001-02, the Assessing Officer asked the assessee to explain as to how the deduction under section 80-O could be allowed. The explanation of the assessee vide letter dated 13-1-2004 was as under: "The assessee is receiving fees from foreign countries and foreign enterprises in convertible foreign exchange, for professional services for use outside India of any patent, invention, design registered Trademark. A list from whom this convertible foreign exchange has been received has already been submitted. Expenses incurred to earn this foreign exchange amounts to Rs. 1,17,561. ...The net receipt of foreign exchange will not be reduced to Rs. 18,16,021.20. 40 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o any income received, income should be in consideration of the use of design or trademark in the appellant case this is not so. In view of the above, the claim of the appellant is rejected and the disallowance is confirmed." Aggrieved by the orders of learned CIT(A), the assessee has preferred these appeals before the Tribunal. 4. The learned Counsel for the assessee has assailed the order of learned CIT(A) by contending that the omission of the word fee from the section 80-O effective from assessment year 1998-99 would not disentitle the assessee from claiming deduction under the said section inasmuch as the amended provisions effective from assessment year 1998-99 allows deduction in respect of any income received by the assessee which would include all kinds of income including fee. The substance of the argument is that the word income is of widest amplitude and therefore would include income by way of fee and consequently the claim of the assessee could not be disallowed on the ground that the word fee appearing in section 80-O has been omitted with effect from assessment year 1998-99. It was also submitted that object of the section is to bring the foreign excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, design or registered trade mark and such income is received in convertible India of any patent, invention, model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provide or agreed to be made available or provided to such Government or enterprise by the assessee, or in consideration of technical or professional services rendered or agreed to be rendered outside India to such Government or enterprise by the assessee, and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, or having been converted into convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee in accordance with any law for the time being in force for regulating payments and dealings in foreign exchange, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction of an amount equal to fifty per cent of the income so received in, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable cannot be conferred by ignoring or misinterpreting the words in section as held by the Hon ble Supreme Court in the case or Ipca Laboratory Ltd. v. Dy. CIT [2004] 266 ITR 521 1 . Up to the assessment year 1997-98, the assessee was eligible for deduction under section 80-O because of the expression information concerning industrial, commercial or scientific knowledge experience or skill and not because of the expression use outside India of any patent, invention, model, design, secret formula or process or similar property right . The combined reading of both the provisions shows that the Legislature deliberately excluded the income by way of commission, fees, etc. relating to information concerning industrial, commercial or scientific knowledge experience or skill from the scope of section 80-O. No doubt that the word income is of the widest amplitude and would generally include fees but income eligible for section 80-O is restricted to the use outside India of any patent, invention, design or registered trademark. Therefore, any income related to any other item would not fall within the scope of section 80-O. 6. Now the question arises, whether the consultation or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike were burnt to ashes. For the assessment year 1995-96 the assessee was requested to prepare a Balance Sheet as on 31-3-1995. The assessee prepared a list of Assets Liabilities which they could muster. However there was a difference between the Assets Liabilities of Rs. 12,31,694.55 which was shown as Sundry Clients. A claim was subsequently received from one of the client of Rs. 10,000 and the balance now stands at Rs. 12,21,694." Subsequently, the Assessing Officer asked the assessee to show cause as to why the aforesaid amount should not be taxed under section 41(1) of the Act. In response to the same, it was stated by the assessee that the provisions of section 41(1) were not applicable. However, the Assessing Officer for the reasons given in his order, applied the provisions of section 41(1) of the Act and consequently made the addition of Rs. 12,21,694. 8. The matter was carried in appeal before the learned CIT(A) who sustained the addition by observing as under: "I have considered the arguments of appellant and the contentions of the Assessing Officer. It is a fact that the appellant has not unilaterally written off the amount in the accounts. At the same time, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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