Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 199 - AT - Income TaxTreatment of the technical fees paid to M/s Mahindra & Mahindra for use of design, drawing production tooling for manufacturing of independent front suspension - nature of expenditure - revenue or capital - Held that:- The assessee company, being auto part manufacturer for M/s Mahindra & Mahindra is solely dependent upon the business given to it by M/s Mahindra & Mahindra and in view of the required modernization in the IFS system, the said M/s Mahindra & Mahindra made payment to the Korean company, M/s Samlip for developing the prototype tooling and allowed the assessee to use the same for manufacturing the IFS components as per the requirement of M/s Mahindra & Mahindra on payment of technical fee. Clearly in such a case, M/s Mahindra & Mahindra got the ownership over the asset and the assessee was granted limited rights by Mahindra & Mahindra to use the same to Manufactur IFS System, in accordance with their requirement, on payment of Technica1 fee'. In view of the same, the decision of the Ld. CIT(A) in treating the payment as held to be revenue in nature is correct one. Even otherwise, the assessee has been making such payment from AY 1999-2000 onwards, which have been accepted as revenue in nature by the Department in the earlier years - Decided in favour of assessee Disallowance u/s. 14A - Held that:- Calculations / quantifications needs to be examined at the level of the AO, because Ld. CIT(A) has not given any chance to the AO for making such calculations/ quantifications which in the interest of justice is very essential. Accordingly, in the interest of justice, we set aside the issue in dispute to the file of the AO for fresh consideration and decide the same in view of the law laid down by the Hon’ble Delhi High Court in its decision dated 2nd September, 2015 in the case of Cheminvest Ltd. vs. Commissioner of Income Tax (2015 (9) TMI 238 - DELHI HIGH COURT).
|