9911796707
TMI Blog2012 (11) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... RAO, JM These two sets of cross appeals and cross objections are directed against the respective orders of the CIT(A) for the Assessment Year 2001-02 2002-03. The assessee has also filed the appeal against the order of the CIT(A) passed u/s 154 dated 10.9.2004 for the Assessment Year 2001-02. 2 First we will take up the appeal of the assessee for the Assessment Year 2001-02 in which the assessee has raised the following grounds: (1) The Commissioner of Income-tax (Appeals) erred in upholding the action of the ACIT) in disallowing expenditure on software of ₹ 2,58,175 treating the same as capital expenditure. (2) The CIT(A) erred in upholding the action of the ACIT in adding an amount of ₹ 33,16,900 to the value of closing stock on account of MODVAT. (3) (a) The CIT(A) erred in upholding the action of ACIT in disallowing advertisement expenditure in foreign currency of ₹ 34,32,472 under section 40(a)(i) of the Act. (b) The CIT(A) ought to have held that in accordance with the provisions of the DTAA between India and Russia, the payments made were not chargeable to tax in India and accordingly there was no obligation to deduct tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than two years and therefore, such right of user can t result obtain the benefit of enduring nature or result in acquiring any asset having any resale value. The ld Sr counsel has referred the details of the expenditure and submitted that the software purchased by the assessee is only for administrative use and could not result in obtaining any benefit of enduring nature. He has relied upon the decision of the Hon ble Jurisdictional High Court in the case of CIT vs Raychem RPG Ltd reported in 21 Taxman 507(Bom) and submitted that the Hon ble High Court has upheld the order of this Tribunal based on the decision of the Special Bench of the Tribunal in the case of Amway Enterprises. The ld Sr counsel has submitted that when the expenditure incurred on software which does not form part of apparatus of the assessee, the same is an allowable expenditure. The ld Sr counsel has also relied upon the decision of the Hon ble Delhi High Court in the case of CIT vs M/s Asah India Safety Glass Ltd and submitted that the issue of expenditure on software has been decided by the Hon ble High Court in favour of the assessee and by following the said decision, the decision of the Special Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit was on account of raw material purchased by the assessee and accordingly, the assessee is entitled for the same. He has referred section 145A of the I T Act and submitted that adjustment can be made to increase the amount of any tax, duty, cess or fee actually paid or incurred by the assessee; whereas in the case of the assessee, Modvat credit is not the actual amount paid or incurred by the assessee towards the liability of tax, duties, cess or fee as provided u/s 145A; therefore, no adjustment can be made on account of Modvat credit due to the assessee. The ld Sr counsel has further contended that the Modvat credit due to the assessee is on account of purchase of raw material on which all taxes, duties were already been paid by the manufacturer and not by the assessee. He has referred the tax audit report and submitted that the method of valuation of closing stock has been explained in Schedule III, clause 12 as well as in the note to the tax audit report. Thus, the ld Sr counsel has submitted that the assessee has valued its inventory and closing stock as per the method of accounting regularly employed by the assessee. 8.1 On the other hand, the ld DR has submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on account of unutilized modvat credit, the corresponding opening stock of that year should also be increased. Ground No.3 is allowed. 10 Following the earlier order of this Tribunal in assessee s own case we decide this issue accordingly direct the Assessing Officer to make the necessary adjustment in the opening stock by the relevant amount of unutilised Modvat credit of last year. 11 Ground no. 3 is regarding disallowance u/s 40(a)(i). 11.1 The assessee has incurred an advertisement expenditure in the foreign currency of ₹ 34,32,472/- on which tax was not deducted. Since similar disallowance was made by the Assessing Officer in the earlier assessment year; accordingly, the amount of ₹ 34,32,472/- incurred on TV advertisement campaign was disallowed. 11.2 On appeal, the Commissioner of Income Tax(Appeals) has confirmed the disallowance made by the Assessing Officer on this account by following the order for the Assessment Year 2000-01. 12 Before us, the ld Sr counsel for the assessee has submitted that for the Assessment Year 1998-99, the Tribunal has held that in the absence of PE in India, the payment made to non-resident is not taxable in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Year 1998-99 has held that the expenditure is revenue in nature and not capital; therefore, we follow the finding of the Tribunal and accordingly hold that the expenditure incurred on advertisement on TV film and commercial as well as other promotional film is revenue in nature. 13.2 Since the issue for the Assessment Year 1998-99 also involved the disallowance u/s 37(1) on the ground that the expenditure has not been incurred wholly and exclusively for the purpose of the business of the assessee and the authorities below have followed the earlier years order while disallowing the expenditure for the Assessment Year under consideration; therefore, this aspect is required to be considered for this year also. The Tribunal for the Assessment Year 1998-99 has adjudicated this issue in para 13 as under: 13. Now coming to the last aspect as to whether expenditure has been incurred by the assessee wholly and exclusively for the purposes of its business or not. We observed that the said product Dlianos is not registered in the name of the assessee company but is registered in the name of NIL in Russian Federation. Ld A.R. has also not brought any documents on record that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the claim of the assessee as per law. Hence, Ground No.1 of the appeal of the assessee is allowed for statistical purposes. 13.3 The Tribunal has set aside the issue to the record of the Assessing Officer for deciding the claim of the assessee afresh because there was no material on record to establish that the said expenditure has been incurred wholly and exclusively for the purpose of the business of the assessee. Though, the ld Sr counsel for the assessee has submitted that for the year under consideration, the assessee has produced the relevant records to show that the expenditure has been incurred wholly and exclusively for the purpose of the business of the assessee; however, since the issue has not examined by the authorities below independently and disallow the claim of the assessee by following the earlier year order; therefore, this aspect of the issue is required to be examined after verification of the relevant records claimed to have been filed by the assessee. 13.4 Further, for the Assessment Year 1998-99, the Tribunal has taken note of the fact that the product Dlianos is not registered in the name of the assessee company but is registered in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the foreign company like conduct of clinical trial of new drugs, translation of technical, documents, training of field staff etc., are in the nature of technical services within the meaning of Explanation 2 to sec 9(1)(vii) of the Act. The Commissioner of Income Tax(Appeals) was of the view that if the assessee was in doubt, he should have applied to Assessing Officer u/s 195(2) which was not done and instead, the payments were made to foreign company without deduction of tax u/s 195(1) accordingly, disallowance made u/s 40(a)(i) was confirmed. 17 Before us, the ld Sr counsel for the assessee has submitted that as far as the requirement of application u/s 195(2) is concerned, the same is not necessary in view of the decision of the Hon ble Supreme Court in the case of GE India Technology Centre P. Ltd. v. Commissioner of Income-tax reported in 327 ITR 456 and the Assessing Officer has to examine the withholding the tax u/s 195(1) in the assessment while proposing the disallowance u/s 40(a)(i) of the Act. 17.1 Apart from advancing the arguments at length on the point whether the payments made by the assessee for rendering of the services by the foreign company is in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. He has submitted that the said provision is applicable on the payment as prescribed u/s 40(a)(i) which is payable outside India and not non resident only or in India to a non resident. Thus, the ld DR has submitted that the provisions are attracted only to the payment which is payable outside India; even if the payments are made by the assessee to its PE in foreign county. 17.4 In rebuttal, the ld Sr counsel has submitted that the provisions of sec. 40(a)(i) are applicable with respect to the payment on which tax is deductible at source under Chapter XVII-B and as per sec. 195, the payment to a non resident or to foreign company is subjected to deduct tax thereon. Therefore, the provisions of sec 40(a)(i) prior to amendment vide Finance Act 2003 were applicable only in respect to the payment to the non resident or a foreign company. He has also referred the circular reported in 176 ITR (Statute) 164 and submitted that the provisions of sec. 4(a)(i) are for the purpose of compliance of se c 195 and therefore, withholding of tax on the payments to non resident falls u/s 195. Thus, the ld Sr counsel has submitted that the purpose of sec. 40(a)(i) is only to ensure deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments payable to non resident or foreign company. 19 An identical issue came before the Delhi Benches of the Tribunal in the case of Herbalife International India (P.) Ltd. (supra) wherein the Tribunal has held in paras 20 to 26 as under: 20. At the outset, we take up for consideration the question whether in view of the provisions of Article 26(3) of the DTAA between India and USA, even assuming that the payment in question is not a reimbursement of expenses and even assuming that they were fees for included services within the meaning of Article 12(4) of the said DTAA between India and USA, whether the provisions of section 40(a)(i) of the Act, cannot be applied in this case and consequently no disallowance can be made. A decision on this question, in our view, will obviate the necessity of deciding the other questions raised in point (A) above. We may at this stage itself mention that apart from the consequence of disallowance of expenditure for non-deduction of tax at source at the time of making payment to a non-resident, the assessee as a person responsible for making payment of any sum chargeable to tax to a non-resident is obliged to deduct tax at source unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected in the other Contracting State to any taxation or any requirement connected therewith which is much more onerous, then it is on the nationals of that other Contracting State. Article 26(2) provides against discrimination in the context of a permanent establishment in the other Contracting State. Article 26(3) is a general clause providing for Indirect discrimination against a non-resident, it reads thus : Article 26(3) : Except where the provisions of paragraph-1 of Article 19 (Associated Enterprises), paragraph-7 of Article-11 (Interest), or paragraph-8 of Article-12 (Royalties and Fees for included Services) apply, interest, royalties, and other disbursements paid by a resident of a Contracting State to a resident of the other Contracting State, shall, for the purposes of determining the taxable profits of the first mentioned resident, be deductible under the same conditions as if they had been paid to a resident of the first mentioned State. The provisions of section 40(a)(i) as it stood prior to it s amendment by the Finance Act, 2003 with effect from 1-4-2004 applied to payments by an assessee outside India to a non-resident only. After 1-4-2004 the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now revert to Article 26(3) of the DTAA which deals with nondiscrimination. To illustrate as to what extent the non-discriminate clause would apply, we may make a reference to such clauses in the OECD Model of Double Taxation Convention , Organisation for Economic Cooperation and Development ( OECD ) is an organization, comprising of member countries, for economic cooperation. It s Fiscal Committee had taken up for consideration the study of questions relating to double taxation and of other fiscal questions of a similar technical nature. The Committee after examining methods by which taxation can be used to promote improved allocation and use of economic resources, both domestically and internationally and after considering ways of increasing the effectiveness of taxation as a policy instrument for achieving Government objectives, have made a model Double Taxation Convention. The member countries generally use this model as a basis for negotiating Double Taxation Conventions. India is not a member of the OECD. We may at this stage set out the provisions of non-discrimination as contained in the OECD model. Article 24(4) of the OECD model is in pari materia the same as that of Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes. 26. As already observed by us the provisions of section 40(a)(i) as it existed prior to it s amendment by Finance Act, 2003, with effect from 1-4-2004 provided for disallowance of payment made to a non-resident only where tax is not deducted at source on such payment at source. A similar payment to a resident does not result in disallowance in the event of non-deduction of tax at source. Thus a non-resident left with a choice of dealing with a resident or a non-resident in business would opt to deal with a resident rather than a non-resident owing to the provisions of section 40(a)(i). To this extent the nonresident is discriminated. Article 26(3) of Indo-US DTAA seeks to provide against such discrimination and says that deduction should be allowed on the same condition as if the payment is made to a resident. Thus this clause in DTAA neutralizes the rigour of the provisions of section 40(a)(i). By virtue of the provisions of section 90(2) the law which is beneficial to the assessee to whom the DTAA applies, should be followed. We therefore hold that in view of Article 26(3) of Indo-US DTAA, the Assessing Officer cannot seek to invoke the provisions of section 40(a)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at other state in the same circumstances and under the same conditions are or may be subjected. This provisions shall, notwithstanding the provisions of article 1, also apply to persons whoa re not residents of one or both of the contacting states. 19.4 It is evident from the original language of article 22(1) and the amended article by protocol amending the agreement, particularly the underlined portion of amended provisions of Article 22(1) re-numbered as 24(1) that the amended provisions of Article 22(1) renumber as 24(1) is also applicable to the persons, who are not residents of one or both of the contracting states. Since the payment in the case of the assessee is to Switzerland company; therefore, the amendment in the treaty vide notification dated 7.2.2001 with respect to non discriminatory provisions are not relevant and affecting the case of the assessee. It is clear from the language of article 22(1) and re-numbered as 24(1) that nationals of a contracting state cannot be subjected to more burdensome requirement connected with any taxation, then the requirement to which the nationals of other state in the same circumstances. Accordingly, following the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty from the total turnover for the purpose of computing the deduction u/s.8OHHC. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in directing that the gross exchange gain of ₹ 12,59,000/- should not be excluded to the extent of 90 /a from the profits and gains of business as it is not a receipt covered by Explanation (baa) to Sec.8OHHC ignoring the fact that the exchange gain was not related in any manner with the export activity of the assessee. 5. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in directing to reduce 90 o of the net receipts from R D services from the profits and gains of business for the purpose of computing deduction u/s.8OHHC as against the action of the AO in reducing 9O /o of the gross receipts from R D services and erred in ignoring the fact that the receipts from R D services were on account of exploitation of excess capacity available with the assessee. 6. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in directing not to reduce 9O /o of the gross receipts arising from IT Services, Koishet Site sharing expenses and Kolshet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitute the same business, it must follow that amount has been borrowed by the assessee for the purpose of its business and interest paid thereon is to be allowed as deduction u/s.36(1)(iii) of the Act. It was further held that a loan taken or capital borrowed is, by itself, not a capital asset and so long as loan was taken or capital was borrowed for the purpose of business, assessee is entitled to claim interest paid thereon as deduction u/s.36(1)(iii) of the Act. It was also held that interest may have been capitalized but still assessee is entitled to claim deduction as revenue expenditure for the purposes of Income tax Act. Hon ble Calcutta High Court in the case of CIT vs. Berger Paints India Ltd., 254 ITR 503(Cal) held that if according to the revenue laws the assessee is entitled to treat a sum as a revenue expenditure, then that legal right of the assessee is not estopped by the treatment given by the assessee to it in its own books of account. Similar view has been taken by Hon ble apex Court in the case of Kedarnath Jute Mfg. Co. Ltd. v. Commissioner of Income-tax, 82 ITR 363(SC). Hence, we uphold the order of ld CIT(A) by rejecting Ground No.1 taken by department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s weighed with the Assessing Officer in reopening the assessment is that the assessee claimed a deduction of ₹ 14.53 crores under section 10B. The deduction was restricted to ₹ 11.11 crores in the order. While reopening the assessment, the Assessing Officer has proceeded on the basis that section 10B provides an exemption and that in respect of the Crab Stick Unit the assessee had suffered a loss of ₹ 1.33 crores. The Assessing Officer has observed that since the income of the unit was exempt from taxation, the loss of the unit could not have been set off against the normal business income. However, this was allowed by the assessment order and it is opined that the assessee's income to the extent of ₹ 1.33 crores has escaped assessment. 24 There is merit in the submission which has been urged on behalf of the assessee that the Assessing Officer has while reopening the assessment ex facie proceeded on the erroneous premise that section 10B is a provision in the nature of an exemption. Plainly, section 10B as it stands is not a provision in the nature of an exemption but provides for a deduction. Section 10B was substituted by the Finance Act of 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituted by the Finance Act, 2000 with effect from 1 April 2001. The section as it now stands, is not a provision for exemption, but a provision which enables an assessee to claim a deduction. As it now stands, the section contemplates a deduction of such profits and gains as are derived by a hundred per cent export oriented undertaking from the export of articles and things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be. The deduction has to be allowed from the total income of the assessee. In Hindustan Lever Ltd. v. Dy. CIT [2010] 325 ITR 102 / 191 Taxman 119 (Born.) a Division Bench of this Court considered the provisions of Section 1 OB, while considering a petition challenging the action of the Assessing Officer in purport to reopen the assessment under Section 148. The Division Bench noted that upon the substitution of the provision by the Finance Act, 2000, Section l0B was no longer a provision for exemption, but a provision for deduction. The Division Bench observed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from any other source under the same head. Section 71 provides for the setting off of a loss sustained with reference to one head of income against income from another head, (save and except for capital gains). Under Section 72, a provision has been made for carry forward and setting off of a loss sustained against the head of profits and gains of business or profession. Under Section 72, where a loss which has been sustained under the head of profits and gains of business or profession cannot be set off against income under any head of income under Section 71 so much of the loss as has not been set off or the entire loss where there is no income under any other head can be carried forward in the manner which is indicated in the provision. Section 72 which provides for a carry forward of a business loss comes into operation only when the provisions of Sections 70 and 71, as the case may be, are exhausted. There is no provision in Section 10-B by which a prohibition has been introduced by the Legislature in setting off of a loss which is sustained from one source falling under the head of profits and gains of business against income from any other source under the same head. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aka High Court in the case of Yokogawa India Ltd is on the issue of setting off of loss from non STGP unit before allowing the deduction u/s 10A and even the Hon ble Karnataka High Court has relied upon the decision of the Hon ble jurisdictional High Court in the case of Hindustan Unilever Ltd (supra); therefore, the said decision would not help the case of the revenue. 29.2 Even otherwise, when a series of decision of the Hon ble jurisdictional High Court are in favour of the assessee on the issue; therefore, the same are binding on us and accordingly, by following the decision of the Hon ble Jurisdictional High Court in the case of Hindustan Unilever Ltd (supra). We decide this issue in favour of the assessee and against the revenue. 29.3 Having held that the provisions of sec. 10B are in the nature of deduction and not exemption; we are of the view that the provisions of sec. 14A are not attracted as far as the issue involved in ground no 1 ( c) is concerned, 29.4 As far as the issue involved in ground no.2 regarding the setting off of loss of STP unit u/s 10B are against other business income, the same is covered by various decisions of the Hon ble jurisdictional Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociated Capsules Pvt Ltd (SC) reported in 247 CTR 372. 35 Having considered the rival submissions as well as the relevant material on record, at the outset, we note that an identical issue has been considered by the Tribunal in assessee s own case for the AY 1998-99 and 1999-00 in para 23 as under: 23. At the time of hearing, it was conceded by ld D.R. that the issue is covered against the department by the decision of Hon ble apex Court in the case of ACG Associated Capsules (P) Ltd vs. CIT, (2012) 247 CTR 382(SC). Accordingly, it was submitted by representatives of both sides that issue may be restored to the file of AO with the direction to work out the deduction u/s. 80HHC of the Act in the light of the said decision of Hon ble Supreme Court i.e. by considering the net receipt. Hence, Ground Nos.1 2 of appeal taken by department are allowed for statistical purposes by restoring the issue to the file of AO with a direction to consider the net receipts while computing the deduction allowable u/s.80 HHC of the Act. 36 Following the earlier order of this Tribunal, this issue is remitted to the record of the Assessing Officer for computing the deduction u/s 80H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions as well as the relevant material on record, we note that in the case of Pfizer Ltd. (supra), the issue before the Hon ble jurisdictional High Court was regarding insurance claim on the stock which was part of the business activity of the assessee and not an independent income 39.1 An identical issue was considered by the Tribunal in para 22.1 of the order for the Assessment Year 2000-01 as under: 22.1 In respect of amount of ₹ 34,12,000, which has been written back by the assessee u/s.41(1) of the Act on the ground that liability is no longer required, we agree with ld A.R. that the Tribunal vide order dated 28.7.2008 in the case of Unichem Laboratories Ltd(supra) has held that the amount written back constitute business profits and have to be considered while working out deduction u/s. 80HHC of the Act as business income. Therefore, we hold that the authorities below were not justified to exclude 90% of ₹ 34,12,000 while computing deduction u/s. 80HHC of the Act. 39.2 As far as the scrap sale is concerned, since in the absence of any details an identical issue was remitted to the record of the Assessing Officer by the Tribunal in para 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r advertisement expenditure in foreign currency of ₹ 17,43,963 under section 40(a)(i) of the Act. (c) The CIT(A) ought to have held that in accordance with the provisions of the DTAA between India and Russia, the payments made were not chargeable to tax in India and accordingly there was no obligation to deduct tax at source and correspondingly the disallowance under section 40(a)(i) could not be sustained. (5) The CIT(A) erred in rejecting the appellants claim for allowance of deduction on account of amortisation of cost of leasehold land premium as revenue expenditure. 42 Ground no.1 is regarding disallowance of expenditure on software by treating the same as capital expenditure. 43 This ground is common to the ground no.1 of the assessee s appeal for the AY 2001-02. Accordingly, following our findings for the AY 2001-02, we set aside this issue to the record of the Assessing Officer to examine and adjudicate the same afresh in the light of the decision of the Special Bench in the case of Amway (supra). 44 Ground no.2 is regarding addition due to valuation of closing stock on account of Modvat. 45 This ground is common to the ground no.2 of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance u/s 40(a)(i) of advertisement expenditure in foreign currency. 50 This ground is common to the ground no. 4 of the assessee s appeal for the AY 2001-02. Therefore, following our findings for the AY 2001-02, we decide the issue in favour of the assessee. 51 Ground no 5 is regarding disallowance on account of amortization of cost of leasehold land premium as revenue expenditure. 52 The assessee has claimed amortization of cost of lease hold premium as revenue expenditure which was denied by the Assessing Officer. 52.1 On appeal, the CIT(A) has dismissed the ground raised by the assessee by holding that by paying lease rent the assessee has acquired a capital asset of enduring nature which is in the nature of a leasehold right. The claim does not pertain to any expenditure incurred which mitigates or reduces the business expenses otherwise to be incurred by the assessee, as it was in the case of Commissioner of Income-tax v. Madras Auto Service (P.) Ltd., report in 233 ITR 468. 53 Before us, the ld Sr counsel for the assessee has submitted that the lease hold premium is allowable revenue expenditure. In support of his contention, he has relied upon the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Mukund Ltd (supra). However, in the case in hand, neither any material nor details are filed before us. Even the lease deed by which the assessee acquired the lease hold land has not been produced. We further note that no details or any other relevant materials/documents has been produced before the authorities below for examination of the relevant necessary facts in this regard. Hence, in the absence of any relevant fact as well as material, it is not possible to give a finding on this issue. 55 In the above facts and circumstances of the case as well as in the interest of justice, we remit the issue to the record of the Assessing Officer for examination of the relevant facts and records and then decided the issue as per law in the light of the decision on this point. The assessee is directed to produce the lease deed as well as other relevant details of lease rentals before the Assessing Officer. ITA No. 5077/Mum/2005 (AY 2002-03) By the Revenue: 56 The revenue has raised the following grounds in this appeal: 1 On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in directing to allow depreciation @ 60% on software expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Year 2001-02. While deciding the appeal of the assessee for the Assessment Year 2001-01, we have set aide the issue to the record of the Assessing Officer for deciding the same in light of the decision in the case of Amway Enterprises. Therefore, following our findings for the Assessment Year 2001-01 in assessee s appeal, this issue is set aside to the file f the Assessing Officer for deciding the same in light of the decision of the Special Bench in the case of Amway Enterprises. We clarify that the depreciation on computer would be allowable at the rate provided in the schedule for the relevant year. 60 Ground no. 2 is regarding disallowance u/s 10B. 61 This ground is common to the ground no.2 of revenue s appeal for the Assessment Year 2001-02. Therefore, following our findings for the Assessment Year 2001-01, we decide this issue in favour of the assessee and against the revenue. 62 Ground no.3 is regarding exclusion of Excise duty from the total turnover for the purpose of computing deduction u/ 80HHC. 63 This ground is also common to the ground no.3 of the revenue s appeal for the Assessment Year 2001-02. Therefore, following our findings for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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