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2014 (1) TMI 487 - AT - Income TaxRoyalty & lump sum fee – Held that:- Following assessee’s own case for A.Y. 2003-04 - The assessee obtained only the right to use, during the currency of the agreement, the technical knowhow and information and the intellectual property right relating to the manufacture of Honda cars and did not secure any ownership right over them - The payment of lump sum fees for the technical know-how and the royalty is allowable as revenue expenditure – Decided against Revenue. Disallowance of provision of warranty and sales services – Held that:- Following assessee’s own case for earlier years and Jay Bee Industries v. DCIT [1997 (12) TMI 136 - ITAT AMRITSAR] - The liability to carry out repairs/replacements accrues on the date when the sale agreement is executed with warranty clause and such in-built liability cannot be ignored - Such liabilities are to be treated as trading expense and must be allowed - The expenses were allowed for the reason it was not a contingent liability and such liability arose as soon as assessee made the sale – Decided against Revenue. Disallowance of airfare of technicians, entry tax u/s 43B, software Expenses – Held that:- Following assessee’s own case for earlier years – Decided against Revenue.
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