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TMI Blog2014 (10) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed on the ground that the same being registration fees. If the assessee has taken the premises on rent, merely because the date on which the premises is taken on rent, is unable to carry on the business, would in law, make no difference and the rent paid would not become the capital expenditure if two months is taken to commence the business of the unit. The finding recorded by the three authorities that two months prior to the commencement of the unit constitutes the capital expenditure is unsustainable. Similarly, the payment of registration fees constitutes capital expenditure is unsustainable and therefore,the findings recorded by the three authorities are hereby set aside and the 1st substantial question of law is answered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order passed by the Tribunal. At the time of admission, three substantial question of law has been raised. They are as under: 1. Whether on the facts and in the circumstances of the case, the Honourable Tribunal was right in law in holding that the rent paid to the landlord and registration expenses of Chennai unit are in the nature of capital expenditure? 2. Whether on the facts and in the circumstances of the case, the Honourable Tribunal was right in law in holding that the telecommunication expenses are to be excluded from the export turnover when such expenses were not part of negotiated price and hence did not originally form part of negotiated price and hence did not originally form part of export turnover? 3. Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees. If the assessee has taken the premises on rent, merely because the date on which the premises is taken on rent, is unable to carry on the business, would in law, make no difference and the rent paid would not become the capital expenditure if two months is taken to commence the business of the unit. The finding recorded by the three authorities that two months prior to the commencement of the unit constitutes the capital expenditure is unsustainable. Similarly, the payment of registration fees constitutes capital expenditure is unsustainable and therefore,the findings recorded by the three authorities are hereby set aside and the 1st substantial question of law is answered in favour of the assessee and against the revenue. 4. Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is to be construed as income of the business of the undertaking. There is a direct nexus between this income and the income of the business undertaking. Though it does not par take the character of a profit and gains from the sale of an article, it is the income which is derived from the consideration realized by export of articles. In view of the definition of Income from Profit and Gains incorporated in Subsection (4), the assessee is entitled to the benefit of exemption of the said amount as contemplated under Section 10B of the Act. Therefore, the Tribunal was justified in extending the benefit to the aforesaid amounts also. We do not find any merit in these appeals. Therefore, the first substantial question of law raised in ITA 42 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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