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2012 (4) TMI 239 - HC - Income TaxStriking down the reassessment proceedings initiated u/s 147/148 - change of opinion - respondent filed return of income including capital gain - the assessee has debited a sum of ₹ 2,86,74,323/- under the head of royalty and ₹ 10,73,766/- under the head technicians fee in the P & L a/c ending 31.3.2000 - As per revenue 25% of the royalty expenses should be considered as capital expenditure in view of the Supreme Court judgment in Southern Switchgear Ltd. [1997 (12) TMI 105 - SUPREME Court ]- The assessee is also entitled for royalty fee right and license to use the trademarks within the territory. The acquisition of such a right may be treated partly towards capital and partly towards the revenue thus failure on the part of the assessee to disclose truly and fully all mat erial facts - Held that :- Respondent assessee has filed the profit and loss account wherein royalty has been specifically shown in Schedule 13 in a separate heading, “manufacturing and other sale expenses”. This fact is also admitted in the reasons to believe itself - reading of the assessment order along with profit and loss account indicates that the expense/question of payment of royalty was examined before the assessment order u/s 143(3) was passed - there was no failure or omission on the part of the respondent assessee to disclose the head and the quantum thereof - Even TDS certificates and other details were filed -the Revenue has not been able to indicate and state, the specific failure or omission on the part of the respondent assessee to disclose fully and truly the material facts - that the present case falls in the category of change of opinion as at the time of original proceedings the AO examined and gone into the question of royalty - Appeal or revenue dismissed.
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