TMI Blog2020 (3) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... 005-06, the said payment of royalty has not been allowed in the hands of the assessee. In all the later years, starting from Assessment Year 2007-08, the royalty has been allowed as revenue expenditure in the hands of the assessee by the CIT(A) upto Assessment Year 2011-12. In Assessment Year 2012-13, the Assessing Officer vide order passed u/s 143(3) r.w.s 144C of the Act dated 09.03.2016 has allowed the payment of royalty as revenue expenditure. Even the TPO had not made any adverse reference in his order u/s 92CA(3) - appellate orders have been filed before us and following the principal of consistency also, the issue needs to be decided in favour of the assessee. - ITA No.48/Del/2011 - - - Dated:- 6-1-2020 - Ms. Sushma Chowla, JM And Dr. B.R.R. Kumar, AM For the Appellant : Sh. Salil Kapoor, Adv., Ms. Ananya Kapoor, Sh. Samarth Chaudhary, Adv. For the Respondent : Ms. Ashima Neb, Sr.DR ORDER PER SUSHMA CHOWLA, JM The present appeal filed by assessee is against order of CIT(A)-VI, New Delhi dated 19.10.2010 relating to assessment year 2006-07 against the order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also asked to produce the original documents. The first difference which was noted by the CIT(A) was the difference in the rates of the commission. Another thing which was noted by him was that the agreement dated 01.04.2005 was signed by only one party i.e. the assessee and subsequent agreement, which was signed by both the parties; then, the terms of the agreement were evaluated by CIT(A) and on page 6 of the appellate order, it was concluded by holding that the assessee by entering into the said agreement had acquired benefit of enduring nature hence, the payment made could not be treated as revenue expenditure. Reliance was placed on the decision in Southern Switch Gear Ltd. vs Commissioner Of Income Tax 16 taxmann.com 79, which was affirmed by the Hon ble Supreme Court, reported in 232 ITR 359 (SC) to hold that the assessee in the present case had acquired knowledge of enduring nature hence, the same was capital expenditure. 5. The assessee is in appeal against the order of the CIT(A). 6. The Ld.AR for the assessee after taking us through the orders of the authorities below pointed out that it had entered into contract with the foreign party w.e.f. 01.04.1997 under whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced reliance on the following decisions:- (a) CIT vs Neo Poly Pack (P.) Ltd. (245 ITR 492) (Delhi High Court) (b) CIT vs Ciba of India Ltd. (69 ITR 692) (Supreme Court) (c) CIT vs G4S Securities System India (P) Ltd., (338 ITR 46) (Delhi High Court) 7. The Ld. DR for the Revenue on the other hand stressed that the agreement filed by the assessee was not genuine. It was pointed out that during the appellate proceedings, the assessee did not have the copy of the agreement which was signed by the other party and did not even bear the signatures of the witnesses. Then, reference was made to the contents of agreement and heavy reliance was placed on orders of authorities below. The Ld. DR for the Revenue also pointed out that the Reserve Bank of India had liberlised the rules with regard to royalty payment, to point out that in all the cases of payment of royalty under the automatic route, prior registration with RBI was necessary. 8. We have heard the rival contentions and perused the record. The issue which is arising in the present appeal is with regard to payment of royalty of ₹ 31,11,900/-. The assessee had entered into an agreement with M/s. Coperion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and found them to be at variance. The assessee explained its case but the same was not accepted by the CIT(A). The assessee before us has filed an affidavit in support of its contentions in this regard and we find merit in the plea of the assessee that by mistake/confusion, the agreement was not correctly filed before the Assessing Officer but the same was available before the CIT(A). Another linked aspect is the explanation of the assessee that it had filed the agreement which was signed by the assessee company before the CIT(A) and the signature of the other party admittedly were not there on the same, but before the CIT(A), the said error was pointed and the assessee called for other copy from the licensor and furnished the same before the CIT(A). Before us, same has also been produced during the course of hearing. The Ld.AR for the assessee also produced the original agreement before us for perusal. We find merit in the plea of the assesse that under which one document which was available with the assessee was signed by the assessee but the original copy of agreement, which was available with the licensor bore the signatures of both the parties and was even dated 01.04.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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