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TMI Blog2015 (10) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... l expenditure as held by the Assessing Officer. 2. The Ld CIT(A) has erred on facts and in law in deleting the addition on account of depreciation on computer peripherals amount to Rs. 73,832/- ignoring the facts that depreciation on computer peripherals can be allowed only @ 15% and not 60%. 3. The appellant craves leave for reserving the right to amend, modify alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. The brief facts of the case are that the case of the assessee was selected for scrutiny and during assessment proceedings, the Assessing Officer observed that assessee had debited an amount of Rs. 53,98,410/- which was paid as royalty to Cryobank International Inc. Florida, USA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technology and trademark furnished by the said foreign company to the assessee initially as well as during the course of assessee's carrying on the business of storage and preservation of cord blood stem cells etc which is capital." 3. The Assessing Officer further observed that assessee had claimed depreciation on computer peripherals and accessories @ 60% whereas the same was allowable only @ 15%. Therefore, he made the addition of excess depreciation amounting to Rs. 73,832/-. 4. Aggrieved with the addition the assessee filed appeal before Ld CIT(A) and submitted various submissions based upon various clauses of license agreement to highlight that the payment was revenue in nature. The assessee argued that the payment was revenue in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld CIT(A) Delhi in appeal No.144/11-12 dated 15.3.2012 are reproduced below:- "I have carefully considered the assessment order and the submissions made by the Ld AR. Under the facts and circumstances as discussed above, I find that the said payment has been made towards annual fee/royalty or use of technology and trademark of the licensor, M/s Cryobank International In. Florida USA calculated on the basis of sales turnover of the appellant. The said license provides the appellant company with non exclusive rights to operate the technology and use the trade mark for a period of 20 years. The one time license of Rs. 2,64,75,376/- paid by the appellant to the above licensor for the purpose of obtaining the license has already been capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion the Ld DR relied upon the order of assessment order. 10. The Ld AR, on the other hand, submitted that in assessment year 2007-08 similar issue had arisen and Ld CIT(A) had deleted the addition against which revenue had not filed any appeal and therefore that order has become final and revenue now cannot take a contrary stand. Moreover, it was submitted that the expenses were clearly revenue in nature as they were linked with the turnover of the company. As regards capitalization of royalty in earlier year it was submitted that one time payment at the time of entering into license agreement was definitely a capital expenditure and was capitalized whereas the regular annual expenses are of revenue nature. Therefore were rightly allowed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of technology which the assessee had admitted as being of capital nature and royalty payment in consideration of providing technology services. The payment of royalty depended on the quantum of domestic as well as export sales which would decrease or increase every year depending upon the decrease or increase in the sales. This payment was not because of transfer of technology but for providing technical services. In such circumstances, the payment of royalty which was a continuous process, should have been treated as revenue expenditure." Therefore, relying upon the judgment of Hon'ble Delhi High Court judgment and on the basis of facts and circumstances of the case we do not find any infirmity in the order of Ld CIT(A). Therefore, g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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