TMI Blog2016 (1) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 1227 - DELHI HIGH COURT] decided the question in favour of the Assessee and against the Revenue. In the aforementioned decision, reference was made to the decision of the Supreme Court in Rotork Controls India Pvt. Ltd. v. CIT [2009 (5) TMI 16 - SUPREME COURT OF INDIA] Discharge the initial onus of reasonability of quantum of model fee - Held that:- ITAT has found that the payment made by the Assessee to HMCL was for the development of the model and that the market research and study was only to ascertain what kind of model was required by the Assessee. Once HMCL developed the model as per the specification of the Assessee, it gave the complete technical information and knowledge in relation to the model to the Assessee. Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has no objection to the delay being condoned. CM APPL No. 29857/2015 (for delay in re-filing the appeal) 2. The application is accordingly allowed. 3. This appeal by the Revenue is directed against the order dated 23rd November 2012 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 5120/Del/2010 for the Assessment Year ( AY ) 2006-07. 4. The following five questions have been urged by the Revenue: (i)Whether on the facts and circumstances, the ITAT was right in law in deleting the addition of ₹ 169 crores made by AO/TPO by treating the royalty (inclusive of technical guidance fee) as revenue expenditure by completely ignoring the fact that this addition was rightly made by treating this expenditure as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd allowability of any expense is in the domain of the Revenue. 5. As far as Question (i) is concerned, it is answered in favour of the Assessee in the Assessee s own case in CIT v. Hero Honda Motors [2015] 55 taxmann. com 230 (Del.). As far as Question (ii) is concerned, it is seen that the ITAT has restored the matter to the Assessing Officer ( AO ) to rework the disallowance under Section 14A of the Act in the light of the decision of this Court in Maxopp Investment Ltd. v. CIT [2011] 203 Taxman 364. 6. As far as Question (iii) is concerned, in the Assessee s own case for AY 2002-03, this Court by order dated 14th July 2014 in ITA No. 281 of 2014 (CIT-IV v. Hero Honda Motors Ltd.) decided the question in favour of the Assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the payment made by the Assessee to HMCL was for the development of the model and that the market research and study was only to ascertain what kind of model was required by the Assessee. Once HMCL developed the model as per the specification of the Assessee, it gave the complete technical information and knowledge in relation to the model to the Assessee. Thereafter, the Assessee carried out the research and development for the absorption of technology of the new model and indigenization of spare parts. Consequently, the presumption of the AO that there was a joint activity was factually incorrect. This Court is of the view that the view taken by the ITAT appears to be a plausible one and does not call for any interference. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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