TMI Blog2009 (5) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal and the High Court recorded a finding that the new agreement in April, 1992 was not a subterfuge or clandestine device to reduce the tax liability but was an expenditure incurred on business expediency and the decision of the parties to enter into an agreement was based on commercial consideration - 3512, 3473 OF 2007 - - - Dated:- 8-5-2009 - IN THE SUPREME COURT OF <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /> INDIA </㠠Ϥ�݉TÓÊÎÄԱ䖐Ա> Commissioner of Income Tax, Udaipur Rajasthan Versus Mcdowell Co. Ltd.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> Dr. ARIJIT PASAYAT and Dr. MUKUNDAKAM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets which related to the closed business of Fast Food Division/Unit of the assessee company as such not used during the previous year? D. Whether in the facts and in the circumstances of the case, the Division Bench of the High Court was justified in affirming the findings of ITAT deleting the disallowance of Rs.14,51,100/- holding that the technical service charges (royalty) payment under consideration is allowable based on subsequent agreement dated 10.4.1992 at higher rate than that based on earlier agreement entered into in December, 1990 even though earlier agreement entered into in December, 1990 was to be effective upto 2000 and had neither been substituted nor rescinded? 3. The question raised before the High Court are same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nical services charges to Mcdowell and during the assessment year 1996-97 it would have been required to pay Rs.107.323 lacs as per the old agreement whereas the assessee has during these two years paid Rs.30 lacs for each year. The Tribunal and the High Court recorded a finding that the new agreement in April, 1992 was not a subterfuge or clandestine device to reduce the tax liability but was an expenditure incurred on business expediency and the decision of the parties to enter into an agreement was based on commercial consideration. The finding is essentially a finding of fact based on cogent assessment of the factual scenario. We find nothing infirm in the decision of the Tribunal and the High Court to warrant interference. The challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to State for parting with its exclusive privilege as an incident of trading activities by the State for the assessment year in question? 4. Whether in the facts and circumstances of the case, the Division Bench of the High Court was justified in law in affirming the findings of the ITAT whereby it deleted the addition of Rs.6,69,743/- made by the Assessing Officer on account of disallowance of Research and development expenses holding that the same were not covered under Section 35(1)(iv) of the IT Act, 1961 by wrongly relying on the decision in ITA 1546/JP/95 dated 30.3.2001? 5. Whether in the facts and circumstances of the case, the Division Bench of the High Court was justified in law in affirming the findings the ITAT allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment expenses not covered under section 35(1)(iv) of the Income Tax Act, by wrongly relying on the decision in the ITA No.1546/JP/95 dated 30.03.2001"? 4. "Whether on the facts and in the circumstances of the case the Hon'ble ITAT was justified in deleting the disallowance of Rs.15,62,580/- holding that the technical service charges (royalty] payment under consideration is allowable based on subsequent agreement dated 10.04.1992 at higher rate then that based on earlier agreement entered into in December, 1990 even though earlier agreement entered into in December, 1990 was to be effective upto 2000, and had neither been substituted nor rescinded"? 3. The dispute in essence related to the applicability of Section 43B of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay Rs.107.323 lacs as per the old agreement whereas the assessee has during these two years paid Rs.30 lacs for each year. The Tribunal and the High Court recorded a finding that the new agreement in April, 1992 was not a subterfuge or clandestine device to reduce the tax liability but was an expenditure incurred on business expediency and the decision of the parties to enter into an agreement was based on commercial consideration. The finding is essentially a finding of fact based on cogent assessment of the factual scenario. We find nothing infirm in the decision of the Tribunal and the High Court to warrant interference. The challenge of the revenue on that ground fails. 5. The appeal is disposed of accordingly. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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