Court upholds deletion of Rs.33.82 crores from license royalty as business expense. Revenue's appeal dismissed.

The Court upheld the decision to delete Rs.33.82 crores from the license royalty paid by the assessee, as it was found that the payment was for business purposes. The Tribunal's ruling was supported by previous decisions involving the same assessee, and the Court dismissed the Revenue's appeal, stating that no substantial question of law arose.

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Issues:
1. Whether the Tribunal erred in deleting a specific amount from the license royalty paid by the assesseeRs.

Analysis:
1. The Revenue challenged the Tribunal's decision regarding the deletion of Rs.33.82 crores, which was 40% of the license royalty paid by the assessee to the owner of the brand and trademark. The Transfer Pricing Officer (TPO) had initially found no price adjustment necessary. However, the Assessing Officer disallowed the sum based on the TPO's observations that the royalty payment and advertisement expenses were not entirely for business purposes. The CIT (Appeals) directed the deletion of the disallowance, and the ITAT upheld this decision.

2. The ITAT, in its order, noted that the issue was covered by previous decisions and held that the ld. CIT (Appeals) rightly deleted the addition of Rs.33.82 crores based on earlier Tribunal orders. The Tribunal also referred to a decision involving the same assessee from a previous year, where a similar approach was taken, and the Court dismissed the Revenue's appeal.

3. The Court found no reason to deviate from its earlier decision involving the same assessee. It also dismissed the Revenue's argument regarding a subsequent amendment, stating that since the TPO had already concluded that no pricing adjustment was needed, the application of the amendment was irrelevant. The Court concluded that no substantial question of law arose, and therefore, the appeal was dismissed.

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