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2016 (5) TMI 1340 - AT - Income TaxDisallowance of royalty expenditure - Held that:- Referring to assessee's submission since the above stated product ‘Hercon and Impress’ were newly added products and that it was a commercial decision of the assessee company to sell the said products on no profit basis so as to attract more customers. It has also been submitted that in the subsequent assessment year 2011-12, the parent company i.e. M/s. Hercules INC, USA has waived off the entire royalty payable by the assessee and that the assessee has not paid any royalty to the parent company and the entire amount has been offered to tax by the assessee company for A.Y. 2011- 12. It has, therefore, been contended that the disallowance made for the assessment year under consideration would result in double taxation of the same income. Considering the above contentions, we do not find any infirmity in the order of the Ld. CIT(A) while deleting the disallowance of royalty expenditure. The appeal of the Revenue is therefore dismissed. - Decided in favour of the assessee Disallowance on account of travelling expenses made on adhoc basis at the rate of 15% - Held that:- The assessee had claimed the travelling expenses incurred for business purpose of the assessee which were covered by clause 9.6 of the agreement of the assessee with CBC Ltd. Respectively following the findings of the Tribunal given in the own case of the assessee in the earlier assessment year, we delete the adhoc disallowance made by the lower authorities on account of travelling expenses of the employees. This ground is accordingly decided in favour of the assessee. Addition under section 69C - Held that:- The assessee has specifically pleaded that it has not made any payment except ₹ 54,70,621/- through multiple payments to the American Express Bank, which fact has also been confirmed by the said bank. Under such circumstances, the burden shifts upon the AO to prove that the assessee has made payments in excess of what has been claimed by the assessee as the assessee is not supposed to prove the negative. Since there is no other evidence available of any such payments made by the assessee except the AIR information alone, hence, in our view, the additions solely on the basis of AIR information are not sustainable in the eyes of law. This ground of the assessee’s appeal is therefore allowed and the additions confirmed by the Ld. CIT(A) in relation to the above issue are hereby ordered to be deleted.
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