2012 (9) TMI 1057

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....ri K.E.B. Rengarajan, Junior Standing Counsel Respondent by : Shri M. Viswanathan, CA O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : These are appeals filed by the Revenue against a consolidated order dated 26.3.2012 of Commissioner of Income Tax (Appeals)-XII, Chennai, for the impugned assessment years. Sole grievance raised by the Revenue in these appeals are that CIT(Appeals) ....

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....s Tribunal in Revenue's appeal for assessment years 1999-2000 to 2002-03 as also in assessment year 2004-05. In its order dated 17th June, 2011 for assessment year 2004-05 in I.T.A. No. 951/Mds/2009, it was held by co-ordinate Bench of this Tribunal as under:- "7. We have perused the orders and heard the rival contentions. We find that the same issue regarding royalty payment made to M/s COCL w....

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.... there would be no royalty payable. Thus, the running royalty payable has no nexus or direct connection with the manufacture of the product. The liability to pay the royalty arises only when there is a sale. Therefore, we are of the view that the running royalty cannot be said to be a capital expenditure. We do not find any rationale in bifurcation of the running royalty and treating one part as c....