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2012 (9) TMI 543 - AT - Income TaxAddition for expenditure incurred earning dividend income u/s 14A - CIT(A) deleted the addition - Held that:- In terms of decision of in Maxopp Investment Ltd. & Others Versus Commissioner of Income Tax (2011 (11) TMI 267 - DELHI HIGH COURT ) even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of total income, the AO is required to verify the correctness of such claim but in the instant case the AO was handicapped, because of failure of the assessee to furnish relevant details/particulars and accounts while making the disallowance in terms of provisions of sec. 14A. - set aside the order of the ld. CIT(A) and restore the matter to the file of the AO for deciding the issue, afresh - in favour of revenue for statistical purposes. Payment of royalty - Revenue expenditure or capital expenditure - CIT(A) deleted the addition - Held that:- As the assessee was granted a licence for using the know-how to be applied in the manufacturing process. The assessee was required to pay royalty for using such know-how. However, the assessee never became the owner of such know-how but was merely granted a licence to use the same in manufacturing process. The know-how at all the time remains the property of the licensor. At the end of the licence period the assessee was to forthwith return all the plates and drawings, data material and other documents supplied by the licensor to it. Therefore, in view of the ratio laid down by the Hon’ble Supreme Court in the case of CIT Vs. 69 ITR 692 of India Ltd. [1967 (12) TMI 3 - SUPREME COURT] the payment is to be considered as revenue expenditure and no part thereof can be considered as capital expenditure - in favour of assessee.
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