Law:

Section:

I. Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from infrastructure undertakings - Assessment years 1993-94 to 1997-98 - Assessee-company claimed deduction under section 80-IA in respect of third series of plant put up for production of ossein - In course of assessment, Assessing Officer conducted an inspection of said plant and found that plant was not a distinct and separate industrial unit inasmuch as certain common facilities were used for that plant - Accordingly, he disallowed its claim - On appeal, Tribunal allowed assessee's claim on ground that investment attributable to common facilities of old plant utilized in new plant was very insignificant as compared to total investment in new plant and, therefore, new plant set up by assessee was separate and distinct plant - Whether though in normal course, finding of facts recorded by Tribunal pertaining to set up of new industry should be accepted if it is based on cogent and acceptable evidence, but in instant case since Assessing Officer had conducted an inspection and made disallowance based on findings, it was desirable for Tribunal also to have verified facts by itself by conducting an inspection - Held, yes - Whether, therefore, order of Tribunal was to be set aside and it was to be directed to conduct an inspection with notice to parties - Held, yes II. Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1997-98 - Whether where assessee had paid research and development cess to Central Government during relevant previous year, it could be disallowed under section 43B merely because assessee had shown such payment as 'expenditure pending allocation' in its accounts - Held, no III. Section 35AB of the Income-tax Act, 1961 - Technical know-how expenditure - Assessment year 1997-98 - Whether, technical know-how fees paid by assessee for expansion of its project by setting up a new plant would be allowable as deduction - Held, yes FACTS-I The assessee-company claimed deduction under section 80-IA in respect of the third series of plant put up for the production of ossein. In the course of…

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