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2015 (9) TMI 1234 - AT - Income TaxReassessment proceedings - assessment order by CIT (A) by recording a perverse finding that the earlier Assessing Officer has applied mind to the royalty expenses being revenue in nature, was not justified - Held that:- In response to the queries raised by the ld AO, the assessee in its submission dated 5.9.2008, has filed the details in respect of payment of royalty on sales along with agreement entered in respect of royalty, copy of challans of TDS on royalty and copy of approvals received from Ministry of Industry etc. Thus, at the time of scrutiny assessment the ld AO deemed to have applied his mind and he did not choose to make any addition on the issue. In the ‘reason recorded’ the ld AO has not mentioned as to what is the material or information which has come to his possession or to the notice , on the basis of which he is making his belief that the royalty expenses should be treated as capital expenditure. Therefore respectfully following the judgment of the Hon’ble Supreme Court in the case of Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA) and decision of jurisdictional High Court in the case of Munjal Showa Ltd (2012 (4) TMI 239 - DELHI HIGH COURT ), the ld. AO cannot be permitted to change his opinion without any new facts before him. We find that the ld. CIT(A) has analyzed all the material which was submitted by the assessee before the ld. AO in response to queries raised during assessment proceedings u/s 143(3) of the Act and thereafter has given categorical finding on the issue of change of opinion by the Assessing Officer. Therefore there is no perversity in the order of the ld. CIT (A). It may be noted that on merit also the issue has been decided in favour of the assessee by the jurisdiction High Court in AY 2008-09. No error in the order of the ld. CIT(A) and therefore no interference is required in finding of the ld. CIT(A) quashing the reassessment proceeding. - Decided against revenue.
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