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2010 (5) TMI 532 - ITAT, AHMEDABADAddition of income - AO noted that assessee company has paid royalty of Rs. 8,22,773/- @ 3% of the net value of the “electrical yarn cleaner & classikin” - There was an agreement between Shri Rajan Patwa and RJK Industries to allow PKE to exploit the device commercially on payment of royalty - The ld. AR submitted that in the past no disallowance of royalty paid has been made - Ld. DR in rejoinder submitted that merely maintenance or development or upgradation of technology used by an assessee company cannot be made equivalent to a patent or any intellectual property right entitling the assessee company to make the payment of royalty – The claim of royalty as such cannot be allowed except to the extent of maximum permissible remuneration Disallowance of 1/3 motor car and depreciation expenses & telephone expenses – On the basis of the decision in ITA No.55/Ahd/2002 for Asst. Year 1997-98 - In the result, appeal of Revenue is allowed for statistical purposes and the appeals of assessee are partly allowed for statistical purposes
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