TaxTMI 
TaxTMI 
2017 (11) TMI 958
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....ear 2010-11 on the grounds inter alia that :- "1. Whether in the facts and circumstances of the case, the Ld. CIT (A) erred in deleting the addition of Rs. 1,19,35,426/- by holding Royalty payment as revenue expenditure? 1.1. Whether in the facts and circumstances of the case, the Ld. CIT (A) erred in Following the judgment of Hon'ble Delhi High Court in the case of J K Synthetics Ltd. 319 ITR 109 as in that case the expense incurred for royalty payment was for extension of an existing business and thus payment made by the assessee towards this end, would only go to increase the profitability, which is not the case of the assessee? 1.2. Whether in the facts and circumstances of the case, the Ld. CIT (A) erred ....
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.... earned leave respectively by holding these expenses as ascertained liabilities on the basis of actuarial certificates as actuarial certificates are just estimation of liabilities?" 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer capitalized the payment of royalty of Rs. 1,19,35,426/- in the form of technical licence fees on the ground that it is of the nature of enduring benefit. AO also made disallowance of Rs. 12,039/- by allowing the depreciation @ 15% as against 60% claimed by the assessee on UPS. Assessee company has computed book profit u/s 115JB at Rs. 1,38,19,690/-. However, AO being dissatisfied with the explanation furnished by the assessee company computed the book pro....
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....m payment has been made and after termination of the agreement, the assessee company was required to return all drawings and technical papers to its collaborators, no enduring benefit can be accrued to the assessee company. 7. Furthermore on the basis of same agreement entered into between the assessee company and Toyoda Gosei Co. Ltd., similar disallowance of royalty payment for AYs 2008-09 and 2009-10 was deleted by CIT (A), against which no appeal has been filed by the Revenue before the Tribunal and all these facts have been duly elaborated in para 4.2 of the impugned order. In these circumstances, following the rule of consistency also, there is no illegality or perversity in the findings returned by ld. CIT (A) on the issue of roya....
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....g findings :- "10. Ld. Counsel submitted that sec. 79 which disentitles a company in which public is not substantially interested to carry forward and set of the losses against current years income in case there is change in shareholding, is not applicable while computing book profits u/s 115JB. In this regard he submitted that sec. 79 starts with the words "notwithstanding anything contained in this chapter", whereas sec. 115JB starts with the words "notwithstanding anything contained in any other provision of this Act". He, therefore, submitted that applicability of sec. 79 is confined to Chapter VI, whereas section 115JB is a code and, therefore, the book profits have to be computed as per the provisions contained therein. In th....