TMI Blog2016 (1) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... owable as revenue expenditure. However, the AO has taken the view that the same is capital in nature, since the benefit of expenditure has spread for a period of about 50 years. The Ld A.R submitted that the view taken by the assessee finds support from the subsequent decision rendered by the Hon'ble Bombay High Court in the case of Essel Propack Ltd (2010 (3) TMI 293 - BOMBAY HIGH COURT). Before us, the assessee also placed reliance on the decisions rendered by Hon'ble Supreme Court in the case of Alembic Chemical works Co. Ltd (1989 (3) TMI 5 - SUPREME Court ); Assam Bengal Cement Vs. CIT (1954 (11) TMI 2 - SUPREME Court ), M.K. Bros Vs. CIT (1972 (8) TMI 5 - SUPREME Court ). Thus, we notice that the assessee has made a claim on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of payment of technical know how fee (patent) claimed by the assessee as revenue expenditure, but treated by the AO as Capital expenditure. The amount so disallowed was ₹ 2,52,09,490/- and the AO allowed depreciation of ₹ 63,02,702/- thereon. Accordingly, the net addition made by the AO was ₹ 1,89,07,118/- and the AO levied penalty of ₹ 66,20,000/- u/s 271(1)(c) of the Act on the above said disallowance. In the appeal filed by the Assessee, the Ld CIT(A) deleted the penalty by following the decision rendered by Hon'ble Supreme Court in the case of Reliance Petroproducts Pvt Ltd (322 ITR 158). The revenue is aggrieved by the decision of Ld CIT(A). 3. The back ground of the claim made by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of second 5 year period, the assessee changed its name to RPG Life Sciences Ltd and the assessee was allowed to use the registered trademarks of GDS and produce the goods for additional period of 50 years upto 31-05-2048 on payment of consolidated payment of US $ 500000. As per the amendment agreement, no annual royalty is payable. 5. The assessee claimed the above said lump sum payment as revenue expenditure, but the assessing officer treated the same as Capital expenditure and allowed depreciation thereon. The view taken by the AO was upheld by the Tribunal. Subsequently, the AO levied penalty on the amount of disallowance confirmed by the Tribunal, but it was deleted by Ld CIT(A). 6. The ld D.R placed strong reliance on the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. Essel Propack Limited (2010) (325 ITR 185). He also placed reliance on host of other case laws. Accordingly he submitted that the assessee has made a legitimate claim, but the same was not acceptable to the AO and the said disallowance shall not give rise to concealment of particulars of income or furnishing of inaccurate particulars of income. Accordingly he submitted that the Ld CIT(A) was justified in deleting the penalty by following the decision rendered by Hon'ble Supreme Court in the case of Reliance Petroproducts Pvt Ltd (supra). 8. Having heard rival submissions, we are of the view that there is merit in the contentions of Ld A.R. There is no dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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