TaxTMI 
TaxTMI 
2018 (12) TMI 1399
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....ibunal was justified in holding that the technical knowhow expenditure (technical assistance fees) is revenue expenditure ignoring the fact that as per amended provisions of section 32, technical knowhow is an intangible asset and the fee for obtaining the same is a capital expenditure and not revenue expenditure? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the profit of US and UK branches is not taxable in India and should be excluded from the taxable profit of the assessee? (c) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in restoring the issue of taxability of the sale tax exemption benefit of Rs. 58 crores avail....
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....stries Ltd. (supra)". Thus, the Tribunal remanded the issue back to the Assessing Officer to be decided in the light of the Special Bench judgment in the case of Reliance Industries Ltd. The Revenue's grievance in this respect is two fold. It was contended that the issue was raised for the first time before the Tribunal and the same should not have been permitted. Secondly, the view of the Tribunal in case of Reliance Industries Ltd. was challenged before the High Court. The High Court in a judgment dated 15.04.2009 in Income Tax Appeal No. 1299 of 2008 had held that no question of law in this respect arises and thereby confirmed the judgment of the Tribunal. It was pointed out that against this judgment of the High Court, the Departme....
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....t. A question of law has been framed and placed for consideration of the High Court. However, this does not mean that the judgment of the Tribunal as on today stands reversed or stayed. In any case, quite apart from the judgment in the case of Reliance Industries Ltd. of the Special Bench of the Tribunal, it is always been for the assessee to contend before the Assessing Officer by pointing out the relevant clauses of the subsidy that in law the subsidy cannot be treated to be towards revenue account. It would be equally open for the Revenue to oppose such a contention if so advised. The Assessing Officer and the Revenue authorities would have to take a decision in accordance with law. These questions, therefore, are not considered. 6. Com....
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....ppreciated the legal position. As noted, the Assessing Officer also did not seriously dispute that the expenditure was in the nature of revenue expenditure. The only objection of the Assessing Officer was that by virtue of the amendment in Section 32, this position would no longer be valid. We notice that by virtue of such amendment in subsection (1) of Section 32, the legislature recognized and granted depreciation at the prescribed date on knowhow, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998. Thus, sub clause (ii) of subsection (1) of Section 32 merely grants depreciation on the listed intangible....
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....mstances of the case and in law, the Tribunal was justified in holding that profit of the assessee branch in USA viz. Birla Consultancy Software Services is not taxable in India without examining the facts of the case and without appreciating the fact as per Article 24(2) of the DTAA only deduction in respect of taxes on income paid in USA should be allowed as deduction from the tax payable in India, and therefore this decision of the Tribunal is perverse on facts?" 9. The Court in this context opined as under : "3. Re. Question (1) : (a) The impugned order of the Tribunal dismissed the Revenue's appeal on the above issue by following its order in the case of the same Respondent Assessee for Assessment Years 1996-97 and 1997-98. (b)....
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....se of CIT Vs. M/s. Modipon Ltd. in which it was observed as under : "8. We have considered the submissions made on behalf of the parties. Notwithstanding the acceptance by the Revenue of the practice adopted by the assesseeModipon Ltd. in all the assessment years except for the one under dispute as enumerated above and the absence of any challenge to the decisions of the Delhi and the Punjab & Haryana High Courts, the present challenge would still be entertainable so long as it disclose a substantial question of law or an issue impacting public interest or the same has the potential of recurrence in future. The Revenue cannot be shut out from the present proceedings merely because of its acceptance of the practice of accounting adopted by ....