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2013 (7) TMI 729 - AT - Income TaxDisallowance of the royalty on sales paid as capital expenditure - Held that:- Payment towards royalty which was dependant on the quantum of the items manufactured was a revenue expenditure - the quantum of royalty depends upon the sales. - the royalty is paid at a certain percentage of sales it cannot be said that it gives an enduring benefit to the assesse – relying upon the judgement of CIT Vs Kanpur Cigarettes (P) Ltd. (2005 (3) TMI 61 - ALLAHABAD High Court) and Mewar Sugar Mills Ltd. Vs CIT (1972 (9) TMI 12 - SUPREME Court) - royalty payments paid based on sales are allowable as deduction u/s. 10(2)(xv) - royalty payment based on sales are of revenue in nature – court direct the AO to allow the claim of the assesse. Disallowance of 50% being expenses incurred through the credit card by employees for subscription, hotel, lodging and other expenses - Held that:- CIT(A) has allowed the claim of expenditure to the extent of 50%, therefore there is no reason to tamper with the findings of the CIT(A) - Nothing has been brought on record to show the nature of the membership , whether the assessee has taken corporate membership in the various clubs or the individual directors/employees are members of these clubs as no such details are available on record – ground dismissed – appeal decided partly in favour of assessee
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