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2020 (3) TMI 709 - AT - Income TaxDisallowance of royalty expenses - allowable revenue expenses - HELD THAT:- We find merit in the plea of the assessee that under which one document which was available with the assessee was signed by the assessee but the original copy of agreement, which was available with the licensor bore the signatures of both the parties and was even dated 01.04.2005 - the said agreement needs to be considered for deciding the issue arising in the present appeal. The assessee had used the technical information by way of technical assistance rendered by the licensor to the assessee in India and consequently, the payment of royalty was for the purpose of carrying on the business of the assessee - claim of the assessee on sales of ₹ 17 crores as against the total sales of the year of ₹ 28 crores. The assessee had entered into the said agreement after the liberlisation by the RBI w.e.f. 24.06.2003 under the automatic route and accordingly, we hold that the said royalty has to be allowed as revenue expenditure in the hands of the assessee. It is only in Assessment Year 2005-06, the said payment of royalty has not been allowed in the hands of the assessee. In all the later years, starting from Assessment Year 2007-08, the royalty has been allowed as revenue expenditure in the hands of the assessee by the CIT(A) upto Assessment Year 2011-12. In Assessment Year 2012-13, the Assessing Officer vide order passed u/s 143(3) r.w.s 144C of the Act dated 09.03.2016 has allowed the payment of royalty as revenue expenditure. Even the TPO had not made any adverse reference in his order u/s 92CA(3) - appellate orders have been filed before us and following the principal of consistency also, the issue needs to be decided in favour of the assessee.
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