2016 (7) TMI 678

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....nt : Mr. M.S. Syali, Sr. Advocate with Mr. Mayank Nagi and Ms Husnal Syali, Advocates ORDER 1. This appeal by the Revenue is directed against the order dated 14th October 2015 passed by the Income Tax Appellate Tribunal ("ITAT") in ITA No. 1432/Del/2011 for the Assessment Year ("AY") 2004-05. 2. The question of law urged by the Revenue is whether the ITAT was justified in deleting the add....

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.... royalty rate that was paid in the earlier years and the 'effective royalty' during those years. The Assessee was able to demonstrate that the average effective rate of royalty paid during the five years from 1998-99 to 2002-03 was 59% and that by revising the royalty agreement to 56%, it had actually resulted in a lower payout during the current year. The Assessee also attributed the enha....

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....is change had been made after following due procedure and approval from FIPB. 33. The assessee, in its submission dated 8-11-2006, had stated that the change in royalty rate was prompted by present exchange control regime as the earlier agreement had been a result of the controls imposed by Government of India"s foreign exchange control policy. Prior to FY 2003-04 the assessee made royalt....

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....the Indian Master Licensee as well as requirement of necessarily computing the royalty payable with reference to the list price and not actual sales value." 5. It has been rightly noted by the ITAT, once the liberalized policy did away with the requirement of computing the royalty with reference to the list price (Indian Published Price), the Assessee moved from the regime of royalty payment as....