Appeal dismissed on royalty depreciation, capital expenditure deduction, and outstanding creditors addition.

The Court dismissed the appeal regarding depreciation on royalty, deduction under section 35(1)(iv) for capital expenditure, and deletion of addition on outstanding creditors. The Court relied on previous judgments and the Revenue's failure to appeal on similar issues from the previous year. No costs were awarded.

---

---

Issues Involved:
1. Depreciation on royalty paid by the Assessee Company
2. Deduction under section 35(1)(iv) for capital expenditure
3. Deletion of addition on outstanding creditors under section 41(1)

Analysis:

1. The first issue pertains to the depreciation on royalty paid by the Assessee Company to M/s. Lyka Labs Ltd. The Tribunal had allowed the depreciation, which was challenged in the appeal. However, the Court noted that identical issues were raised for the Assessment Year 2005-06, and in a previous order, the Court had dismissed the Revenue's appeal on the same matter. Therefore, the Court declined to entertain this issue.

2. The second issue involves the claim of the Assessee Company for a deduction under section 35(1)(iv) for capital expenditure incurred towards the construction of a building used for research and development. Similar to the first issue, the Court found that the Revenue had raised identical issues for the Assessment Year 2005-06, and the Court had already dismissed the appeal on these grounds previously. Consequently, the Court decided not to entertain this issue as well.

3. The final issue concerns the deletion of an addition made by the Assessing Officer on outstanding creditors under section 41(1) of the Income Tax Act. The Court observed that the impugned order followed the decision in the Respondent-Assessee's own case for the Assessment Year 2005-06. Despite the Revenue appealing the Tribunal's decision for the previous year, it did not file an appeal on the specific issue related to outstanding creditors for the current year. Therefore, the Court saw no reason to entertain this issue and dismissed the appeal accordingly.

In conclusion, the Court dismissed the appeal, citing previous judgments and the Revenue's lack of appeal on specific issues. No costs were awarded in this matter.

---