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2012 (7) TMI 560 - HC - Income TaxDisallowance made of royalty paid by the assessee to CAMI USA for distribution of software products in India - whether the royalty should be allowed to be written off to the extent of the unpaid invoices during the year itself - ITAT deleted the disallowance - Held that:- Merely because the respondent had paid the royalty even in respect of the products sold by it to the clients, who had not paid for the same, it would make no difference to the determination of the Arm's Length Price of the transaction - Once it is accepted that the ALP of the royalty is justified, there can be no reduction in the value thereof on account of the assessee's customers failing to pay the assessee for the product purchased by them from the assessee. Transactions between the respondent and CAMI are unrelated to the transactions between the respondent and its clients i.e. purchasers of the products from the respondent. CAMI was not concerned with the respondent's inability to recover the consideration from its clients. It is not suggested that the transactions in this case either between the respondent and CAMI or the respondent and its clients are colourable - in favour of assessee.
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