O/TAXAP/1395/2006 JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1395 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER 1 Whether Reporters of Local Papers may be allowed to see judgment ? 2 To be referred to Reporter or not ? 3 Whether their Lordships wish to see fair copy of judgment ? 4 Whether this case involves substantial question of law as to interpretation of Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to civil judge? COMMISSIONER OF INCOME TAX Appellant(s) Versus AIA MAGOTTEAUX LTD. Opponent(s) Appearance: MR MANISH BHATT, SENIOR ADVOCATE WITH MRS MAUNA M BHATT, ADVOCATE for Appellant(s) No. 1 MR SN DIVATIA, ADVOCATE for Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE KS JHAVERI Page 1 of 4 O/TAXAP/1395/2006 JUDGMENT and HONOURABLE MR.JUSTICE K.J.THAKER Date : 12/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with impugned order passed by Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as ITAT) dated 29.06.2005 in ITA No. 2352/Ahd/1999 for Assessment Year 1996-97, revenue has preferred present Tax Appeal. 1.1 This Court while admitting present appeal formulated following substantial question of law for consideration: Whether, Appellate Tribunal is right in law and on facts in confirming order passed by CIT(A) deleting disallowance of Rs. 4,71,39,724/- made by Assessing Officer on ground that said payment was not on account of royalty but on account of payment of technical know how fees covered by section 34AB of Act? 2. assessee firm is engaged in business of manufacturing and selling of Alloy steel castings used in cement factories and thermo power stations. Assessing Officer disallowed assessee s claim of royalty payment to two foreign parties on ground that expenditure was of capital nature and that payment was for technical know Page 2 of 4 O/TAXAP/1395/2006 JUDGMENT how. On appeal by assessee, CIT (Appeals) allowed appeal and held that payment was royalty and not fee for technical knowhow. 3. On appeal before ITAT by revenue, by impugned order, ITAT dismissed appeal and confirmed order passed by CIT(A). Being aggrieved and dissatisfied with impugned judgment and order passed by ITAT, revenue has preferred present Tax Appeal for consideration of aforesaid substantial question of law. 4. Mr. S.N. Divatia, learned Counsel appearing on behalf of assessee has submitted that as such issue involved in present Tax Appeal is now not res integra in view of decision of this Court rendered in Tax Appeal No. 361 of 2001 on 24.11.2014 wherein this Court has answered question in favour of assessee. This Court relying on decision of this Court in Tax Appeal No. 326 of 2000 rendered on 03.07.2012 has answered aforesaid question in affirmative. 5. We have heard Shri Bhatt, learned advocate appearing on behalf of Department and Shri Divatia, learned advocate appearing on behalf of assessee. similar question came up before this Court in Tax Appeals No. 361 of 2001 as well as 326 of 2000 and this Court while deciding said issue has held that said expenditures were revenue in nature. We are not giving further elaborate reasons for same as issue has already been concluded by this Court and question has already been answered in favour of assessee. Even otherwise we are in complete agreement with Page 3 of 4 O/TAXAP/1395/2006 JUDGMENT reasonings adopted by Tribunal on facts also. Tribunal has followed its own order in assessee s own case for assessment year 1993-94 in ITA No. 128/Ahd/1997 dated 13.05.2003 and confirmed findings of CIT(A). 6. In view of above, we answer question raised in present appeal in affirmative i.e. in favour of assessee and against revenue. We hold that Tribunal was justified in confirming order passed by CIT(A) deleting disallowance of Rs. 4,71,39,724/- made by Assessing Officer on ground that said payment was not on account of royalty but on account of payment of technical know how fees covered by section 34AB of Act. Consequently, impugned order passed by ITAT is confirmed. Accordingly, present appeal is dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 4 of 4 Commissioner of Income-tax v. Aia Magotteaux Ltd