TMI Blog2010 (7) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... pproved by RBI, royalty @ 5% of domestic sale was paid for use of trademark Nike – Held that: - It is settled law that if expenditure brings into existence a capital asset or gives any advantage of enduring nature to an assessee, it can be treated as capital expenditure. - both the CIT(A) and ITAT have concluded that royalty payable was related to the sales made during a particular year and accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity "Act 1961") challenging the order in Appeal No. 3171/Del/2007 dated 18th December, 2008 passed by the Income Tax Appellate Tribunal (in short "ITAT"). 2. Briefly stated the facts of the present case are that the assessee had obtained a licence from Nike company for sourcing, marketing and sale of footwear an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non transferable license to use the trade mark Nike in connection with sourcing, marketing land sale of goods. The technical know how and other information for manufacture of products was to be provided by Nike to the assessee. It was made clear as per clause 6 of license agreement that the trade marks, registrations, applications, good will associated with them would remain exclusive property of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure….." 4. Ms. Rashmi Chopra, learned counsel for revenue submitted that the ITAT erred in law and on merits in deleting disallowance of Rs.90,62,600/- made by the Assessing Officer on account of payment of royalty paid by the assessee to Nike International Limited. 5. Consequently, the only issue that arises for consideration in the present proceedings is whether payment of royalty fees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nical information and/or trademark upon termination of agreement, there was no advantage of enduring nature derived by the assessee from the said agreement. Consequently, in our opinion, royalty fee is a revenue and not a capital expenditure. Accordingly, the present appeal being bereft of merits is dismissed in limine but no order as to costs. MANMOHAN, J CHIEF JUSTICE JULY 14, 2010 - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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