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Commissioner of Income Tax-06 Versus Metso Minerals (India) Pvt Ltd

2015 (9) TMI 22 - DELHI HIGH COURT

Disallowance @ 50% u/s 40A(2)(a) read with Section 37(1) - AO held that the payment made to the MM Mumbai @ ₹ 500 per hour was excessive and unreasonable - ITAT concluded that the payment to MM Mumbai at the said rate could not be said to be excessive and unreasonable and also found that none of the three situations contemplated by Section 40A (2) (a) of the Act was attracted - Held that:- ITAT has in fact returned a finding of fact after analyzing the material and sufficient details avail .....

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there is no assignment of the intellectual property rights in terms of the agreements in favour of the Assessee. The licenses were granted on non-exclusive basis and for a limited period. The Assessee was not authorized to use or permit others to use such technology except as specifically permitted by the licensor. In these circumstances, the decision of the ITAT that the said expenditure could not be considered as a capital expenditure does not suffer from any illegality or perversity and is co .....

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e. - ITA No. 321/2015 - Dated:- 12-8-2015 - Dr. S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Ms Suruchi Aggarwal, Senior Standing Counsel with Ms Lakshmi Gurung, Junior Standing counsel For the Respondents : Ms Prem Lata Bansal, Senior Adv. with Mr Ram Avtar Bansal & Mr Prashant Kumar, Advs. ORDER 1. This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 ('Act') is directed against the order dated 30th October 2014 passed by the Income Tax Appellate Trib .....

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e MM Mumbai and for which the Assessee paid ₹ 48.31 lakhs to MM Mumbai and received a sum of ₹ 9.01 crores from MM Mumbai. 3. The Assessing Officer ('AO') held that the payment made to the MM Mumbai @ ₹ 500 per hour was excessive and unreasonable in terms of Section 40A(2)(b) of the Act, since the Assessee failed to furnish any comparable case showing that the rate so charged was in conformity with the prevailing market rate. It was observed that MM Mumbai had been incu .....

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s of estimation of expenses placed on record, such as salaries of engineers, office rent, insurance cost and depreciation etc., which was then divided with the number of hours available during the year and further increased by a reasonable profit of 30 to 40%. Secondly, the Assessee made the payment to the MM Mumbai at the same rate which it charged from MM Mumbai for the services rendered by it. MM Mumbai also charged from other group companies @ ₹ 500 per hour and this was not controvert .....

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