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TMI Blog2012 (12) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... he payments made by the branch office or the assessee situated outside India to agents outside the country may not fall within the provisions of sec.195(1) - against revenue. Subsidy receipt - revenue v/s capital - Held that:- Going through the STPI Scheme the issue whether the subsidy received by the assessee in the form of duty waiver on the import of capital goods, casting export obligations on the assessee, has to be re-examined in the light of the STPI Scheme as a whole, a copy of which is now filed before us. AO needs to conduct purpose test of the said subsidy on the one hand, in the light of the cited judgments, and the details of actual capital asset, in respect of which the assessee enjoyed the waiver of the duty on the other, before arriving at proper and legally sustainable decision in the matter. AO should also examine the applicability of the provisions of S.43(1) with its relevant Explanations before reaching any conclusions on the issue by passing a speaking order - thus restore the matter to the file AO for fresh consideration - in favour of assessee by way of remand. - ITA No.704, 762 & 763/Hyd/2010 - - - Dated:- 19-7-2012 - SMT. ASHA VIJAYARAGHAVAN AND SHR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the reasons given by the assessing officer for making the impugned additions are sound and valid, and the disallowances made by him for the years under appeal are reasonable, and as such the CIT(A) ought to have sustained the same. He accordingly submitted that the reliefs granted by the CIT(A) are not justified and hence, disallowances made by the assessing officer should be restored. 7. Learned counsel for the assessee on the other hand, strongly supported the orders of the CIT(A) and submitted that the expenditure under the head travelling and conveyance has been incurred wholly and exclusively for the business of the assessee, and though the bills and vouchers are in the name of the individuals as observed by the assessing officer, the claims made by the employees on the company for these expenses constitute valid evidence to substantiate the claim of the assessee for deduction in respect of these expenses. 8. We heard the parties and perused the material available on record. Even though the assessee has explained before the CIT(A) that the expenses are meant for the purpose of business and are properly vouched and the same have been properly spent, accounted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 2005-06 are identical, and the amount mentioned in ground No.3 for that year is Rs.8,92,614. 10. At the outset, the learned counsel for the assessee, reiterating the submissions made before the lower authorities, submitted that the issue involved in the above grounds of appeal is covered by the decision of the Tribunal dated 20.11.2009 in assessee s own case of the assessment year 2003-04 in ITA No.1170/Hyd/2007, copy of which is furnished at page 129 of the paper-book. 11. Learned Departmental Representative, per contra, strongly supported the order of the assessing officer and submitted that the CIT(A) is not justified in granting relief to the assessee. 12. We heard both the parties and perused the material available on record. We find that the CIT(A) in the impugned orders has followed the order of the first appellate authority for the assessment year 2003- 04, while deleting the impugned additions made by the assessing officer. As submitted by the learned counsel for the assessee, coordinate Bench of this Tribunal vide its order dated 20.11.2009 for that year has upheld the action of the CIT(A) in deleting the corresponding addition made by the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is liable for tax. 1.3. For these and other reasons that are to be urged at the time of hearing of the case, the appellant prays that the orders passed by the assessing officer and sustained by the learned CIT(A) to the extent under context in the present appeal, is contrary to the facts of the case and provisions of law, therefore, the same needs to be deleted in the interest of justice. 15. The issue involved in the above ground relates to the nature of subsidy received by the assessee, which has been treated as of revenue nature, as against the assessee s claim for treating it as of capital nature. 16. Facts of the case in brief are that the assessee company is engaged in the business of development of computer software products. From the notes in the accounts attached to the return of income, it was noted that the assessee mentioned the following The company has availed Customs/Central Excise Duty benefit of Rs.45,55,109/- (previous year : Rs.44,46,521/-) as of March, 31, 2004 in respect of capital goods purchased under 100% Export Oriented Unit Scheme of Software Technology Parks of India, with stipulation of export obligation to be fulfilled by the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el and Press Works Ltd. (228 ITR 253); CIT V/s. Bazpur Cooperative Sugar Factory Ltd. (172 ITR 321) and of the jurisdictional High Court in the case of CIT V/s. Italia(JD) (141 ITR 948), and ultimately concluded as follows- When the export obligation is fulfilled by the assessee, the AR s view point that export obligation is not completely fulfilled till date is not an acceptable argument. The renewal of the earlier agreement stating the compliance of export obligation by the assessee will immediately convert the customs duty benefit given for import of capital goods from the year 1999-2000 to 2001-02 into a trading receipt. Even if the argument of the assessee that the entire export obligation is not fulfilled is accepted that pertains only to only the export obligation pending till April, 2007 as per the supplementary agreement entered on 26-12-2003 with effect from 28.1.2002. The customs duty foregone on imports pertaining to this period i.e. from F.Y. 2002-023 to 2003-04 is only Rs.2,88,365/- (Rs.179777 + Rs108588). To the extent of this amount, the version of the assessee that he benefit received can only be treated as contingent liability pending for fulfillment of export ..... X X X X Extracts X X X X X X X X Extracts X X X X
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