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TMI Blog2023 (6) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... since amalgamated with DCM Shriram Limited) and mere mentioning the name of both the Companies has not resulted in any hardship to the Assessee. Disallowance u/s 80IB(8A) - proof of carrying on research activities - royalty income from Hybrid Cotton Seeds - CIT(A) allowed deduction - HELD THAT:- As trade value received and paid by assessee in respect of technology of Mahyco Mansanto Biotech (I) Ltd. was separate from royalty income which have been received by the assessee company on which deduction u/s 80IB(8A) has been claimed - in the absence of anything on record to prove that the assessee has not carried out any research activities during the year under consideration in respect of Hybrid cotton seeds the disallowance has been deleted. The said observation of the ld CIT(A) neither erroneous nor suffers from infirmity, which requires no interference. Ground of the revenue dismissed. Disallowances u/s 80IB (8A) - miscellaneous income derived from operation profit - CIT-A allowed the claim - HELD THAT:- Since the Ld. CIT(A) has gone into the factual details of the miscellaneous income earned by the assessee and given a conclusion that the amount of Rs. 3,92,972/- is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the representative of the assessee and the matter was adjourned to 23.08.2022 and on going through the appeal memo by the Assessee, it is found that validity of the assessment order passed in the name of non-existent entity therefore, the assessee company has been advised to file Cross Objection by the expert. Since there is no formal notice of appeal was received by the respondent, there is no delay in filing the cross objection and sought for condonation of delay if any. Considering the above facts and circumstances we deem it fit to condone the delay of 63 days in filing of cross objection. 5. The brief facts of the case are that M/s. Bioseed Research India Ltd filed its return of income on 13.09.2012 declaring income of Rs. 2,16,600/-. The case of the assessee was selected for scrutiny and notice u/s 143(2) of the Act was issued on 08.08.2013. It is pertinent to note that M/s. Bioseed Research India Ltd. amalgamated with DCM Shriram Ltd. pursuant to the order of the Hon'ble High Court dated 22.03.2013 w.e.f. 01.04.2013. The assessment order came to be passed on 14.01.2015 in the name of M/s Bioseed Research India Ltd. (since amalgamated with DCM Shriram Ltd.) by c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition No. 46/2013 connected with Company Application (M) No. 9/2013. It is also found that assessee has informed the said fact of amalgamation to the Assessing Officer vide letter dated 13.06.2013 which is reproduced hereunder:- 10. During the assessment proceedings, both the A.O. and the Assessee/appellant herein were aware of the amalgamation and the Representative of the Assessee has participated in the assessment proceedings. The assessment order came to be passed on 14.01.2015 in the name of M/s. Bioseed Research India Ltd. (since amalgamated with DCM Shriram Limited) . It is also gathered from the assessment order that, though order mentioned the name as M/s. Bioseed Research India Ltd., but in the bracket, it has also been mentioned that since amalgamated with DCM Shriram Limited . Accordingly it cannot be said that order has been passed in the name of non existing company as the name of the amalgamated company has clearly been mentioned by the AO in the assessment order. Considering the fact that, the Assessee (M/s DCM Shriram Ltd.) has participated in the assessment proceedings and the A.O. has rightly mentioned the name of Assessee as M/s. Bioseed Research India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company. Even before the aforesaid agreement was entered into by the company, the company has been already developing the hybrid seeds for cotton seeds and has been marketing the same. Further, It is also important to note that the payment being made to the MMB on account of 'tralt value' for use of gene was being borne by the customer namely Shriram Bloseed Genetics India Ltd. and that was in addition to the royalty payment the company had received from its customers in respect of Bt cotton hybrid seeds on the same basis as it has been receiving in respect of other seed products. This fact also is evidence that the aforesaid usage of technology was In addition to the development of hybrid seed by the company. The CIT(A) while passing the order in appeal for AY 2009-10, has also referred to the contention of the appellant company w.r.t. the decision of Hon'ble Supreme Court in the case of Continental Constructions Vs. CIT(A) 195 ITR 81 (SC) and certain other decisions of ITAT that once approval has been given by the prescribed Authority, the Assessing Officer could not reject the claim for deduction in the absence of withdrawal of approval of the prescribed Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellant company had been developed by the company out of its own research. The trade value received and paid by it in respect of technology of Monsanto was separate from the royalty income which have been received by the appellant company on which deduction u/s 801B(8A) has been claimed. AO has not brought anything on record to prove that appellant has not carried out any research activity during the year under consideration in respect of hybrid cotton seed. Hence, addition made by the AO at Rs. 14,78,15,335/- by not allowing deduction u/s 801B(BA) on royalty income from hybrid cotton seeds is not sustainable and it is hereby deleted. 15. It is found that the AO while disallowing the deduction u/s 80IB(8A) of the Act held that, regarding royalty income in respect of cotton hybrid seed was pursuant to technology received by it from Mahyco Mansanto Biotech (I) Ltd. (MMB) and accordingly found that Assessee was not carrying on research activities in regard to cotton hybrid seed. The Ld. CIT(A) by considering the details in support of research activities carried out by the Assessee including hybrid cotton seeds, details of hybrid seeds and also considering the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Activities 181,794 Contribution received from ICRISAT towards expenses Incurred for research for Genetically enhanced Micronutrientdense pearl millet grains for improved human Nutrition in India' 20,000 Training cost recovered from Tamil Agricultural University 8,419/- Sale of Scrap material On going through the details, there could be no doubt that first 3 items of the income are related to research activities of the company and, therefore, same undoubtedly should be considered as a part of business income. Sale of scrap material amounting to Rs. 8,419/-, however, cannot be said to be income derived from research activities. Therefore, claim of the company cannot be accepted to the extent it relates to sale of scrap amounting to Rs. 8,419/-. The Assessing Officer is however directed to consider other three items of income as income derived from research activities. Hence, addition made by the AO confirmed to the extent of Rs. 8,419/- and balance addition made by the AO treating the miscellaneous Income as income from other sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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