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2012 (10) TMI 886 - ITAT, CHENNAIRoyalty payment – revenue or capital – lump sum payment - Held that:- assessee has acquired only a licence to use the brand name and trademarks of the foreign collaborator. A mere lience to use the other party's patent and knowledge have been considered as permissible revenue expenditure by the Apex Court in the I.A.E.C (Pumps) case [232 ITR 316]. However, at the same time, a portion of such expenses would also be in the nature of a capital expenditure to the extent that such expenses were to protect the advantage of using the foreign collaborator's brand name and trademarks. - 25% held as capital in nature and 75% held as revenue in nature. Disallowance u/s 14A read with Rule 8D - held that: - Assessing Officer directed to not to apply Rule 8D in the present case since the assessment year under appeal is 2005-06 and Rule 8D is applicable only from the assessment year 2008-09 – matter remanded Deduction under section 43B in respect of employees contribution to Provident Fund - Held that:- Omission of second proviso to section 43B of the Income Tax Act, 1961 by the Finance Act, 2003 operated retrospectively from 01.04.1988 and not prospectively from 01.04.2004 - Assessing Officer directed to verify as to whether this contribution paid by the assessee before the due date for filing of return - If the payments were made before the due date for filing of return, such contributions are to be allowed as deduction - issue is allowed for statistical purpose
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