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TMI Blog2019 (3) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The assessee has preferred the following grounds of appeal :- " 1. That on the facts and circumstances of the case and in law. the Hon'ble CIT (Appeals) has erred in disallowing a sum of Rs. 31,90,217/- being other income of Unit I for the purpose of deduction under Section 80IC of the Unit I inter alia because. 1.1 The said sum represented incomes on account of service charges, interests, miscellaneous incomes etc. which were directly derived from the manufacturing activity of Unit I. 2. That on the facts and circumstances of the case and in law. the Hon'ble CIT (Appeals) has erred in restricting the deduction under Section 801C of the Unit II to Rs. 5,69.61.935/- as against Rs. 8,22,65,833 claimed by the Appellant inter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer in accordance with Rule 8D of Income Tax Act. " 4. The brief facts of the case is that assessee company is engaged in the business of manufacturing of machinery and equipments for oil well drilling and production activities. It also distributes its products world-wide. For assessment year 2009-10 assessee filed its return of income on 27.09.2010 declaring income of Rs. 17,79,10,920/- under the normal provision and book profit under section 115JB of the Act was declared at Rs. 32.15 crores. 5. The assessee has two units which are eligible for deduction under section 80IC of the Income Tax Act. The learned Assessing Officer noted that assessee has unit one as capital product unit and unit II as commodity product unit. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,75,146/- and interest on others amounting to Rs. 28,752/- was credited by the assessee and also claimed deduction under section 80IC thereon. According to the learned Assessing Officer such income is not derived from the industrial undertaking. 8. Further the software development expenses of Rs. 18,86,648/- was also disallowed holding it to be capital expenditure. Consequently the assessment order under section 143(3) of the Act was passed on 28.03.2013 at a total income of Rs. 29,69,07,632/- against the returned income of the assessee at Rs. 17,79,10,920/-. 9. The assessee aggrieved, preferred an appeal before the learned CIT (Appeals). He allowed the deduction to the assessee under section 80IC of the Act holding that unit I is not eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady decided in favour of the assessee on the same set of facts in earlier years wherein vide para No. 11 the Co-ordinate Bench has allowed the claim of the assessee for deduction under section 80IC of the Act on substantial expansion. 12. The learned Departmental Representative could not show us any reason to deviate from the same. Therefore, respectfully following the decision of the Co-ordinate Bench in assessee's own case for earlier years, we dismiss ground No. 1 of the appeal of the Revenue. 13. Ground No. 2 of the Revenue's appeal and ground No. 1 of the assessee's appeal is with respect to the various other incomes credited as income derived from the industrial undertaking and further allowing deduction under section 80IC of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me may be set aside to the file of the learned Assessing Officer for this year too. 15. The learned Departmental Representative did not express any serious reservation to the above proposition. As the similar income with the same nature of earnings is required to be adjudicated in the earlier years by the Assessing Officer, it would be unfair for us to give our finding on this income as it will negate the earlier orders of the Co-ordinate Bench. So, we also set aside the whole issue back to the file of the Assessing Officer to test each of the income whether they are derived from the industrial undertaking or not by considering the decision of the Hon'ble Supreme Court in the case of Liberty India Vs. CIT 317 ITR O218 (SC) and then decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2 of the appeal of the assessee, which was not pressed before us and, therefore, the same is dismissed. 19. Now we come to ground No. 3 of the appeal where the assessee has incurred expenditure of Rs. 18,86,648/- on account of software development expenditure which was held to be capital expenditure by the Assessing Officer holding that it has given a benefit of enduring nature to the assessee. The claim of the assessee is that same is a license fee and, therefore, it cannot be giving any benefit of enduring nature. The learned CIT (Appeals) held that it was for the development of new products and, therefore, same is a capital expenditure. 20. We have heard the rival contentions. The above expenditure is product development expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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