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TMI Blog2024 (10) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... duction under section 80IC of the Act as appellant had established the manufacturing unit at Parwanoo prior to the amalgamation with erstwhile Mahle. Therefore, provisions of section 80IC(4) of the Act are not applicable in the case of the appellant. There is no proper justification for the addition made by the AO and accordingly the same is deleted. Disallowance of royalty payments - expenses incurred by the Assessee are for enduring benefit and are thus capital in nature? - ITAT deleted addition - HELD THAT:- We note that the Tribunal has relied upon the decision of this Court in Hero Honda Motors Ltd. [ 2015 (2) TMI 368 - DELHI HIGH COURT ] We thus find no justification to interfere with the view taken by the Tribunal. Treating 'income from house property' declared by the Assessee to 'income from other sources' - Assessee has entered into 'lease and License agreement' not 'lease rental agreement' - ITAT deleted addition - HELD THAT:- There is no dispute that the factory building owned by the assessee was let out for which the assessee earned rental income of Rs. 47.26 lakhs. Whether there existed 'leave and licence' agreement and not ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 14A read with Rule 8D to Rs.20,995/- as against Rs.88,577/- restricted by ld. CIT(A) ignoring the fact that even if no exempted income is earned in the particular year, the expenses incurred towards the investment is proportionally disallowable? 2.5 Whether on the facts and in the circumstances of the case. ld. ITAT has erred in upholding the decision of ld. CIT(A) in deleting the disallowance of Rs.32,34,071/- on account of royalty payments ignoring the fact that expenses incurred by the Assessee are for enduring benefit and are thus capital in nature? 2.6 Whether on the facts and in the circumstances of the case, ld. ITAT has erred in deleting the additions upheld by the ld. CIT(A) made by the Assessing officer on the basis of treating 'income from house property' declared by the Assessee to 'income from other sources' owing to the fact that the Assessee has entered into 'lease and License agreement' not 'lease rental agreement'? 2.7 Whether on the facts and in the circumstances of the case, ld ITAT has erred upholding the decision of ld. CIT(A) in enhancing the deduction under section 80IC as computed by the ld. Assessing officer from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is entitled to the deduction u/s 80IA is transferred before expiry of the period specified therein to another India company in a scheme of amalgamation or demerger, whereas the facts of the case in hand show that the manufacturing unit at Parwanoo, HP continued to belong to the assessee and it is only M/s Mahle Filter systems [India] Ltd which amalgamated with the assessee M/s Purolator India Ltd and only the name has been changed to M/s Mahle Filter systems [India] Ltd. Accordingly, even consequent to the amalgamation, the unit at Parwanoo was still owned and managed by the assessee in the same manner as it was managed prior to amalgamation. Considering the correct facts in true perspective, we do not find any error or infirmity in the findings of the CIT(A). Ground Nos.1 and 4 raised by the revenue stand dismissed. In view of the aforesaid findings of facts, we find that the view ultimately taken by the ITAT does not give rise to any substantial question of law. We also take note of our judgment rendered in the context of a Scheme duly approved by a High Court and the lack of authority inhering in the Assessing Officer [ AO ] to doubt its validity or question its provisions in P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the Tribunal has upheld the findings of the CIT(A). The CIT(A) in its order had observed as follows:- 5.3 I have considered facts of the case, the findings of AO and detailed contentions as well as case laws relied upon by the appellant in the instant case, consequent to the merger of the appellant with erstwhile Mahle, the appellant filed an application with the Directorate of Industries intimating it about the merger and change of name of the appellant from Purolator India Limited to Mahle Filter Systems (India) Ltd. Accordingly, the Directorate of Industries acknowledged the change of name of the appellant from Purolator India Limited to Mahle Filter Systems (India) Ltd for all purposes. Further, the amalgamation of Erstwhile Mahle into the appellant was approved by the Delhi High Court on 27 May 2008 which was operative from 1 April 2007. After the amalgamation, the appellant, in accordance with the terms of the amalgamation agreement, filed an application before the ROC requesting it to change appellant's name from Purolator India Limited to Mahle Filter Systems (India) Limited (by which it is presently known). Pursuant to the aforesaid application, ROC, issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... title the benefits of deduction for unexpired period to the successor. Therefore, provisions of section 80IC(4) shall not apply in such as case. In view of the above, there is no ambiguity as to the amalgamation/ merger undertaken by the appellant and its legal and economic effect. While doing so the appellant followed the prescribed procedure. Everything that the appellant did was permitted by law and was perfectly legal in the eyes of law. The legal effect of each of the aforesaid transactions undertaken by the appellant was achieved. It could not, therefore, be said that the appellant had employed any colorable device. It is clear that the appellant is eligible for the deduction under section 80IC of the Act as appellant had established the manufacturing unit at Parwanoo prior to the amalgamation with erstwhile Mahle. Therefore, provisions of section 80IC(4) of the Act are not applicable in the case of the appellant. After considering all the facts and circumstances of the case, I am of the view that there is no proper justification for the addition made by the AO and accordingly the same is deleted. Before us the Revenue could not controvert the findings of the CIT(A) and which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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