TaxTMI 
TaxTMI 
2025 (6) TMI 1530
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.... 2. The assessee, vide 8 grounds and its sub-grounds, has raised following issues: - i. Non affording proper opportunity of being heard, ii. Taxability of royalty of Rs. 77,15,500/- holding it as capital expenditure and also denying depreciation thereon. iii. Chargeability of interest under section 234A, 234B, 234C and 234D of the Income Tax Act, 1961 (hereinafter, the 'Act'). iv. Initiation of penalty under section 270A of the Act. 2.1 Grounds relating to the chargeability of interest under section 234A, 234B, 234C and 234D of the Act and the initiation of penalty under section 270A of the Act, being consequential and premature respectively, do not require specific adjudication; hence, these grounds stand dismissed. General ground....
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....s to the assessee; hence, part of this expenditure needed to be capitalized being capital expenditure nonallowable under section 37 of the Act. The Ld. Counsel drew our attention to the Article-2 to emphasize that the assessee had right to manufacture the licensed products. But it did not own the technical information that was why it had not the right to transfer technical information or sub-licensed it to third parties. The assessee had paid the royalty @ 2.5% and 3% of the net sales in terms of the Article 6 of the Agreements. The Article 10 of the Agreements provided for the obligation of the licensor to continuously provide the appellant assessee all improvements, modifications in the technical information. The Article 11 of the Agreeme....
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....ITR 34. 4.3 The Ld. Counsel submitted the Ld. CIT{A) erred in upholding the assessment order placing reliance of the Tribunal order in assessee's own case for the AYs 2003-04, 2004-05 and 2005-06. However, the Ld. CIT(A) erred in upholding the assessment order without appreciating that in the subsequent years from AY 2007-08 till AY 2015-16, the AO accepted the royalty expenditure as revenue expenditure. Thus, he contended that the royalty expenditure should have been allowed as revenue expenditure in term of principle of consistency. ln this regard it was submitted that the Tribunal had wrongly erred to hold that there was no evidence on record to show that the technology in oil seals changed so fast that the residual benefit was illusory....
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....8 till AY 2015-16. Therefore, following the principle of consistency, the issue of royalty needed to be decided in the appellant assessee favour. 5. On the other hand, the Ld. Sr. DR submitted that this case was squarely covered by the decision of the Tribunal in assessee's own case. That was why it withdrew its appeal filed before the Hon'ble High Court (ITA Nos. 80/2009, 649/2009 and 1046/2010 order dated 24.04.2019) on the reasoning of low tax effect. In principle, the assessee had accepted the Tribunal orders. Hence, he prayed for dismissal of appeal. 6. We have heard both parties and have perused the material available on record. We find merit in the arguments of the Ld. Sr. DR. The factual matrix of the case has been thread bare in ....