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2013 (11) TMI 1244 - AT - Income TaxDisallowance u/s 40A(2)(b) - excessive expenditure paid to related parties - logo fees paid to ATE Enterprises Pvt. Ltd. - Held that:- for making payment of logo brand, which was used by the assessee in its business, it is not necessary that the assessee must have windfall income. - merely because the commission was paid to the payee-company for marketing the products of the assessee, it could not be held that the assessee was not liable to pay logo brand charges when such logo was used in the business of the assessee - In the absence of any material before us to show that logo charges paid at the rate of 1% of the sale value was excessive or unreasonable compared to the market rate and keeping in view the facts that similar logo brand charges was allowed as deduction in its entirety during the earlier years to the assessee, we find no reason in disallowing the logo brand charges paid during the year under consideration. - Decided in favor of assessee. Excessive payment of interest on the deposit - Held that:- the rate of interest to 14% in respect of unsecured loan cannot be held to be so high as to warrant any disallowance under section 40A(2)(b) of the Act, keeping in view the rate of interest, which is charged by the bank in respect of unsecured loan, and even the rate of interest charged by the income-tax department under certain provisions are of 15% per annum. - Deduction allowed - Decided in favor of assessee. Travel expenses - Held that:- it is not necessary that every expenditure incurred by the assessee should result in a corresponding increase in the revenue of the assessee - deduction allowed. Payment made to Advocate for registration of patent rights in foreign countries - revenue or capital in nature - Held that:- the fact that a trade mark after registration could be separately assigned, and not as a part of the good will of the business only, does not also make the expenditure for registration a capital expenditure, that is only an addition and incidental facility given to the owner of the trade mark. It adds nothing to the trade mark itself. - deduction allowed - Decided in favor of assessee.
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