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2016 (5) TMI 1135 - ITAT DELHIDisallowance of commission and ex-gratia paid to the Directors claimed u/s 37(1) by wrongly invoking the provisions of Section 36(1)(ii) - Held that:- Disallowance of remuneration paid to the directors u/s 36(1)(ii) was not justified. Disallowance of royalty paid - revenue v/s capital expenditure - Held that:- The decision of Hon’ble Apex Court in the case of Alembic Chemical Works Co.Ltd. (1989 (3) TMI 5 - SUPREME Court) relied upon by the learned counsel also supports the case of the assessee. Respectfully following the same, we direct that the royalty should be treated as a revenue expenditure and, accordingly, we delete the disallowance made by the Assessing Officer by capitalizing 25% of the royalty expenditure.
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