2017 (8) TMI 1536 - HC - Income Tax

Characterization of expenses - Payment of royalty and lump sum fee - capital or revenue expenditure - HELD THAT - The Revenue is directed to file a compilation of the agreements involved in the Hero Motocorp Ltd. case, the Honda SIEL Power Products Ltd. 2016 (1) TMI 1283 - DELHI HIGH COURT case and the present case before the next date of hearing. It would be open to the Assessee to file a similar compilation before the next date of hearing. Expenditure on airfare booked under technical guidance fee - capital or revenue expenditure - disallowance of entry tax as claimed as a deductible U/s 43B - expenditure incurred on software expenses as capital expenditure instead of revenue expenditure - HELD THAT - Question stand answered against the Revenue by the order in CIT v. Honda SIEL Cars India Ltd. 2013 (5) TMI 1006 - DELHI HIGH COURT . Consequently, the court declines to frame these questions in the present case.

Summary

Issues:
1. Delay in filing and re-filing applications.
2. Appeal by Revenue against ITAT order for AY 2009-10.
3. Four questions urged by Revenue in the appeal.
4. Answered questions against Revenue from previous orders.
5. Contention regarding royalty and lumpsum fee treatment.
6. Dispute over similarity of agreements in different cases.

Issue 1: Delay in filing and re-filing applications
The delay in filing and re-filing applications was condoned and disposed of by the court for reasons stated in the applications.

Issue 2: Appeal by Revenue against ITAT order for AY 2009-10
The Revenue filed an appeal against the ITAT order dated 29th June, 2016 for AY 2009-10. The appeal raised four questions regarding the treatment of various expenditures as capital or revenue expenses.

Issue 3: Four questions urged by Revenue in the appeal
The Revenue urged four questions for consideration in the appeal, related to the treatment of royalty, lump sum fee, airfare expenditure, entry tax, and software expenses as either capital or revenue expenditures.

Issue 4: Answered questions against Revenue from previous orders
The court noted that questions 2.2 to 2.4 had been answered against the Revenue in a previous order dated 7th May, 2013, and therefore declined to frame these questions in the present case.

Issue 5: Contention regarding royalty and lumpsum fee treatment
The Assessee contended that the question regarding royalty and lumpsum fee treatment had also been answered against the Revenue in a previous order for AY 2008-09. The Assessee argued that the agreement in the present case was identical to agreements in other cases.

Issue 6: Dispute over similarity of agreements in different cases
There was a dispute between the parties regarding the similarity of agreements in different cases. The Revenue disputed that the agreement in the present case was the same as in other cases, while the Assessee argued for their similarity. The court directed the Revenue to file a compilation of agreements involved in relevant cases before the next hearing date.

In conclusion, the court addressed various issues related to the appeal by the Revenue against the ITAT order for AY 2009-10, including the treatment of different expenditures and the similarity of agreements in different cases. The court considered past judgments and directed the parties to provide relevant information for further consideration.