Deduction claimed under sec 80 O cannot include sundry expenses

Last updated: 10 May 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
DEDUCTION U/S 80-O:- the assessee was requested to prove their claim for deduction u/s. 80-O with documentary evidences in their favour. The assessee vide letter dt. 11.03.2002 has submitted as under (as extracted):- M/s Galana, Madagascar had approached PII to suggest ways and means to make the Refinery situated in Madagscar viable. In the initial stages before the Management contract was entered into PII was approached by the client to do the design of the refinery process with regard to crude mix, products slate, economics of maximization of crude yield. PII with its vast experience in the field for so many years has developed model design and blueprint which with appropriate adjustment could be of great use in the exercise entrusted to it. The exercise involved a lot of technical and highly skilled effort in studying the present system and implementing the design as prepared by PII for the profitable running of the refinery. Hence, the income so received from M/s Galana during 1998-99 is related to the use of design in improving the performance of Galana Refinery. The consideration received satisfies the necessary conditions for being eligible to deduction u/s. 80-O. Subsequently, PII has entered into a management contract with M/s Galana, Madagascar for Management of their refinery

Citation :
The Dy. CIT, Circle 19(3), Piramal Chambers, R. No. 305, 3rd Floor, Parel, Mumbai-400 012 (Appellant) Vs. M/s. Petroleum India International, C-5 Keshwa, Bandra Kurla Complex, Bandra(E), Mumbai-400 051 PAN-AAAAPOO17B (Respondent)