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2023 (11) TMI 121 - AT - Income TaxNature of expenses - payment of royalty - revenue or capital expenditure - Permission to user the name and Trade Mark - Royalty is payable on the basis of Annual Sales Turnover - CIT(A) directed the AO to delete the addition made on account of royalty payment - HELD THAT:- As in assessee's own case [2022 (4) TMI 804 - ITAT CHENNAI] for the assessment year 2012-13 vide order dated 04.04.2022 assessee is using the trade name as well as management services under contractual terms. The payment was to be made on annual basis and the same was based on fixed percentage of net sales turnover. Upon termination of the agreement, the benefits / licenses / services were to lapse and the assessee was to return the manuals, reports etc. No new asset was acquired by the assessee. The assessee merely acted as user. Therefore, it could not be said that the rights acquired by the assessee were enduring in nature. CIT(A), in our considered opinion, has clinched the issue in the correct perspective and therefore, the same would not require any interference on our part. Appeal filed by the Revenue is dismissed.
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