Commissioner of Income-tax I, Chennai v. Indian Additives Ltd
[Citation -2020-LL-0911-76]
| Citation | 2020-LL-0911-76 |
|---|---|
| Appellant Name | Commissioner of Income-tax I, Chennai |
| Respondent Name | Indian Additives Ltd. |
| Court | HIGH COURT OF MADRAS |
| Relevant Act | Income-tax |
| Date of Order | 11/09/2020 |
| Judgment | View Judgment |
| Keyword Tags | revenue expenditure • capital expenditure • monetary limit • tax effect • royalty |
| Bot Summary: | Indian Additives Ltd. 2/4 Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that only the lumpsum payment made towards acquisition of technical knowhow from M/s.Chevron Oroite Company LLC, USA could be treated as capital expenditure and the running royalty paid every year on the basis of volume of sales ought to be allowed as Revenue Expenditure, even though both the types of payments were towards acquisition of technical knowhow and the right to exclusive use within India as per the agreement 2. When the matter is taken up for hearing, learned Standing Counsel brought to our notice the Circular issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8 August 2019, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/-. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeal filed by the Revenue is dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. |