2017 (11) TMI 1362

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....instead of capital expenditure. 2. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing." 2. The brief facts of the case are that the assessee is engaged in the business of providing facility services. The assessee filed return of income on 29th November,2011 declaring an income of Rs. 12,72,81,485/-. The case was picked up for scrutiny and statutory notices were issued to the assessee. During the course of scrutiny proceedings the Assessing Officer observed that the assessee has made payment of Rs. 1,28,60,000/- towards royalty payment and it has been claimed as revenue expenditure. In this regard the assessee asked to submit the agreements. The assessee submitted in respons....

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.... the First Appellate Authority. The Ld. First Appellate Authority after considering the submissions and order of the A.O. allowed the appeal of the assessee. 2.3. Aggrieved by the order of Ld. CIT(A) the Revenue came in appeal before this Tribunal. 3. Ld. DR relied on the order of the A.O. and submitted that the Ld. CIT(A) has given a well reasoned order by treating the above payments as capital expenditure. The case law relied upon by the assessee are not applicable in the present case. 4. On the other hand the Ld.AR reiterated submissions made before the First Appellate Authority and relied on the order of the Ld. CIT(A). 5. After hearing both the sides and perusing material available on record, we find that the First Appellat....

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....) The royalty is determined on the basis of percentage of turnover and it is not paid as lumpsum, therefore the same can increase or decrease on the basis of turnover. 6.3 I find that various decisions relied on by the AO for disallowance of royalty have been rendered on distinguishable sets of fact and are not applicable to the issue in question. I agree that the appellant has not acquired any benefit of enduring nature and it will not constitute acquisition of any assets. Hence, respectfully following the ratio of various decisions cited by the appellant and particularly and following the decisions of the Hon'ble Delhi High Court in the case of M/s G4S Security Services, 'on similar facts, I hold that the payment of royal....