2012 (10) TMI 200

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..... in law, the Ld. Commissioner of Income Tax (A) has erred in deleting the additions of Rs. 27,21,133/- on account of royalty. iii) The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing." 3. In this case assessee company is engaged in the business of publishing and selling books mainly for school children. Assessing Officer noted during the course of assessment proceedings it was found that an amount of Rs. 18678711/- has been claimed by the assessee as an expense on account of royalty. Assessing Officer observed that Authorised Representative was asked to substantiate the expense and it was submitted by the Ld. Authorised Representative that the royalty is paid to the author of the book .....

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..... deleted the addition holding as under:- "The detailed submissions filed by the Authorised Representative from time to time alongwith the copies of memorandum of agreement entered into between appellant company with the various authors, for payment of royalty, which is based on a percentage of sale proceeds for each title of the printed price on the text books have been gone through. The appellant's Authorised Representative has on 12.8.2010 provided details of the percentage royalty paid to different authors on various titles. These details show the gross value, discount, net value and royalty amount with respect to each of the title. Such exercise has been done for different authors to whom royalty has been paid during the year. It has b .....

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..... " 5. Against the above order the Revenue is in appeal before us. 6. We have heard the Ld. Departmental Representative. None appeared on behalf of the assessee. Upon careful consideration, we find that matter can be disposed of by hearing the Ld. Departmental Representative and perusing the records. We find that Assessing Officer has made the impugned addition by comparing the royalty paid vis-a-vis sales of a particular year. Ld. Commissioner of Income Tax (A) has noted that assessee has submitted various copy of agreements with authors as well as detailed chart of royalty calculation. Considering these agreements and detailed chart of royalty, Ld. Commissioner of Income Tax (A) has held that the entire royalty payment is on revenue accou .....

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