Just a moment...

Report
FeedbackReport
Bars
×

By creating an account you can:

Logo TaxTMI
>
Feedback/Report an Error
Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
TMI Blog
Home / RSS

2019 (9) TMI 186

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....olidated order. 2. The brief facts of the case extracted from ITA3894/Mum/2018 for AY 2011-12 are that the assessee company is engaged in manufacturing and trading of woven and non woven products, filed its return of income for AY 2011-12 on 29-11-2011 declaring total income at Rs. 9,37,19,343. The case was selected for scrutiny and during the assessment proceedings, AO noticed that the assessee has debited a sum of Rs. 89,26,627 under the head, 'licence fees' paid; accordingly, called upon the assessee to explain as to why said expenses should not be capitalised as the same has enduring benefit over a period of time and was not restricted to the current year. The AO, after considering submissions of the assessee and also by relying upon ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... be considered as capital expenditure which gives enduring benefit to the assessee. Accordingly, he deleted addition made by the AO towards disallowance of licence fee paid. Aggrieved by the order of CIT(A), the revenue is in appeal before us. 4. None appeared for the assessee. We have heard the Ld.DR, perused the material available on record and gone through the orders of authorities below. The Ld.DR vehemently argued the issue in light of facts brought out by the AO during assessment proceedings and submitted that licence fees paid to AE for use of brand name is in the nature of capital expenditure, because such licence fee gives benefit to the assessee during the period of agreement. The Ld.DR further argued that the AO has brought out....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....are of the considered view that the AO was incorrect in holding that licence fee paid to AE is in the nature of capital expenditure which gives enduring benefit. The Ld.CIT(A), after considering relevant facts, has rightly deleted addition made by the AO. Hence, we are inclined to uphold the findings of Ld.CIT(A) and dismiss appeal filed by the revenue. ITA No.3895/Mum/2018 5. The first issue that came up for our consideration from this appeal for AY 2012-13 is disallowance of licence fee paid amounting to Rs. 77,30,967. The facts are identical to the issue, which we have already considered and decided in ITA No.3894/Mum/2018, where we have deliberated at length on the issue of licence fee paid to assessee's AE in the light of agreement....