2019 (4) TMI 1362

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....ght in law in deleting the additions of Rs. 2,82,21,192/- on account of technical know-how expenses despite the fact that the expenditure incurred in the form of technical know-how is capital in nature. Further, as per clause 2.6 "the ownership of the technology so developed by assessee with the assistance of Voith Shall always vest with assessee" and thus it is not an interim or adhoc arrangement, rather is acquired permanently". 2. The appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal." (2) At the time of hearing, the Ld. Counsel for Assessee, submitted at the outset that the disputed issue in this appeal regarding Technical Know-how Expenses is covered in favou....

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....lant's case for A.Y. 2010-11. For the sake of convenience the relevant extract from my appellate order for A.Y. 2011-12 in the case of the appellant is reproduced as below: " In nutshell, the AO's observations are as under:- i) The right obtained by the assessee was the right to use the knowhow. ii) The assessee derived benefits of enduring nature which increased the functional capacity of manpower and ultimately resulted in increase of the production. iii) The acquisition of know how under a license was capital expenditure as ultimately it vests permanently with the assessee. Hence, the AO disallowed the entire amount holding the same to be of a capital nature resulting in an addition of Rs. 2,64,37,637/- to the income of the....

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....agreement, the parties can terminate the agreement by giving a three months' notice and upon termination, the appellant has to return copies of technical knowhow and therefore, there is no permanency in the assistance /right to use obtained by appellant so as to classify it as having enduring benefits. iv) The appellant is already engaged in manufacture of the products and expenditure for obtaining technical knowhow for a running concern could never be said to be a capital expenditure. v) The whole purpose of the expenditure has been to improve quality of products and hence improving the profitability without any consequent addition to it's profit earning apparatus. 9. I have considered the facts of the case and gone through t....

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.... and A.Y. 2010-11, I hold that the AO has erred in making an addition of Rs. 2,82,21,192/- on account of disallowance of Technical Know-how Expenses. Accordingly, Ground Nos. 2 and 4 of the appeal of the appellant are allowed." (4.1) We have heard both sides carefully and perused the material available on record. There is no dispute between the two sides that the facts in the case of the Assessee in this year (i.e. A.Y. 2012-13) are identical to the facts of the assessee's case for Assessment Years 2009-10, 2010-11 and 2011-12. There is also no dispute that the Ld. CIT(A) has followed his own orders for Assessment Years 2009-10, 2010-11 and 2011- 12 in deciding the Assessee's appeal for this year. The Co-ordinate Benches of ITAT have alre....