https://www.taxtmi.com/caselaws?id=341017 Bombay HC upheld Tribunal's decision on multiple tax issues. Regarding Modvat inclusion in opening stock, the matter was restored to Assessing Officer for fresh examination following coordinate bench precedent. On royalty payment, HC confirmed Tribunal's allowance of 2% technical know-how royalty instead of TPO's arbitrary 1% restriction, as TPO failed to follow prescribed ALP determination methods under Section 92C and provided no justification. Brand usage royalty was allowed based on commercial expediency principle. Professional fees addition under Section 40A was deleted as Revenue failed to establish excessiveness of advocate fees, making 10% disallowance adhoc. Club entrance fee was treated as revenue expenditure following Otis Elevators precedent. Addition for unaccounted production and sales was deleted as regular books weren't found defective and no evidence existed of off-book transactions. Production loss was allowed following coordinate bench decision for same assessee. en-us Tue, 07 Mar 2017 00:00:00 +0530 Wed, 24 Jun 2026 10:14:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=341017 Bombay HC upheld Tribunal's decision on multiple tax issues. Regarding Modvat inclusion in opening stock, the matter was restored to Assessing Officer for fresh examination following coordinate bench precedent. On royalty payment, HC confirmed Tribunal's allowance of 2% technical know-how royalty instead of TPO's arbitrary 1% restriction, as TPO failed to follow prescribed ALP determination methods under Section 92C and provided no justification. Brand usage royalty was allowed based on commercial expediency principle. Professional fees addition under Section 40A was deleted as Revenue failed to establish excessiveness of advocate fees, making 10% disallowance adhoc. Club entrance fee was treated as revenue expenditure following Otis Elevators precedent. Addition for unaccounted production and sales was deleted as regular books weren't found defective and no evidence existed of off-book transactions. Production loss was allowed following coordinate bench decision for same assessee. Case-Laws Income Tax Tue, 07 Mar 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=341017