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TMI Blog2013 (11) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... ices provided by the assessee, the receipt received by the assessee for supply of these items is inextricably links to the business of its telecommunication services. The A.O. is not justified in excluding these receipts – Deduction allowed u/s 80IA as the situation in this year does not change – Decided against the revenue. Computation of disallowance under Rule 8D read with Section 14A of the Income tax Act – Held that:- Following the Hon'ble Bombay High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT], it was held that The provisions of Rule 8D of the Income tax Rules which have been notified with effect from 24 March 2008 shall apply with effect from Assessment year 2008-09 - In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the case, the CIT(A) erred in law and on facts in holding that INSAT 2E is a domestic satellite within the meaning of sub clause (ii) of clause (4) of Section 80IA of the Income Tax Act 1961, despite the fact that British Telecom has leased it and is operating it. 5. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 2,61,541/- made by the A.O. u/s 14A of the Income-tax Act, 1961 read with Rule 8D of the Income tax Rules 1962. 2. Facts of the case, in brief are: The assessee company is engaged in the business of providing satellite based telecommunication solutions including VSAT services, uplinking services, playout services and broadb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) has allowed deduction u/s 80IA on sale of VSAT equipments by observing as under: "Let us have a look on the nature of equipments. We have perused pages number 29-40 of the paper book. On page 29-31 the copy of the import license for import of C band redundant 1 : 1 to Converter and Down Converter have been placed on record. These are the technical device. Similarly on page 32-33 are the import license on page 34 is the description of the item which are to be imported. At page 34 the description of the item is Codan 40 Wku Bank BUC. According to the assessee these equipments are essential equipments for enabling assessee to the telecommunication services. The Govt. has put up various restrictions on import of such items because of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment made by the assessee is not to any foreign company which was owner of a satellite or operating the satellite in terms of section 80IA(4)(ii). In operative para 19 the ITAT has observed as under: "19. We have duly considered the rival contention and gone through the record carefully. The satellite is a domestic satellite. The British Telecom (Worldwide) has nothing to do with the satellite. It is neither owner of this satellite nor it is operating it. The only role of British Telecom (Worldwide) is that it has taken certain space of this satellite on lease that space has been leased out to the assessee for telecommunication services. Thus the payment made by the assessee is not to any foreign company which was owner of a satellit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. Ltd. 234 CTR (Bom) 1, has, inter alia, observed as under: "v) The provisions of Rule 8D of the Income tax Rules which have been notified with effect from 24 March 2008 shall apply with effect from Assessment year 2008-09. vi). Even prior to Assessment year 2008-09, when Rule 8D was not applicable, the Assessing Officer has to enforce the provisions of sub section (1) of Section 14A. For that purpose, the Assessing Officer is duty bound to determine the expenditure, which has been incurred in relation to income, which does not form part of the total income under the Act. The Assessing Officer must adopt a reasonable basis or method consistent with all the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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