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TMI Blog2013 (12) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... re that the assessee, a company engaged in manufacturing sophisticated chemicals, purchased/imported from Germany, a catalyst in the form of rings which was used in the oxidation process of converting Oxylene to Pthalic Anhydride. Accordingly, the assessee claimed the payment as revenue expenditure. In the assessment framed, AO had considered the payment on purchase of the catalyst with reference to definition of what constitutes royalty as contained in section 9(1)(vi) explanation 2 and concluded that use of patent itself constitutes royalty as is evident from clause (iii) of the Explanation. He was therefore of the view that assessee ought to have deducted tax at source and consequently had made addition to income by invoking provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the relevant product involved in the purchase is 'catalyst for phthalic anhydride' in the form of ring measuring 7x7x4 mm at the cost of 18,82 Euros per Kilogram. This does not suggest that the assessee has purchased any 'patent, invention, model, design, secret formulae or process or trade mark or similar property' which in fact requires the element of the purchase of an intangible asset. Neither the findings of the AO nor that of the Ld. CIT(A) is based on any evidence to support that the payment for purchase of the catalyst includes the payment for the purchase of any of the description mentioned in the explanation to section 9(1)(vi) so as to qualify the consideration as 'royalty' for the purposes of the Act. Thus, the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO to decide the same afresh in the light of the directions given in the said order of the Tribunal and according to law after providing reasonable opportunity of being heard to the assessee. Accordingly, Ground No. 2 is treated as allowed for statistical purposes. 4. Ground No. 3 relates to the disallowance of an amount of Rs.15,71,787 made by AO under section 14A of the Act by invoking Rule 8D and the same confirmed by the Ld. CIT(A). 4.1 During the course of the proceedings, it has been pointed out that this issue is covered by the decision of the ITAT in the assessee's own case for the assessment year 2006-07 wherein it has been held as follows: "We have carefully considered the submissions of the riva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Ld. CIT(A). 5.1 At the outset, it has been pointed out that this ground is covered by the decisions in the cases of Marubeni India (P.) Ltd. v. Jt. CIT [2006] 101 ITD 437 (Delhi), Kanoi Paper & Industries Ltd. v. Asstt. CIT [2002] 75 TTJ 448 (cal.). It is pertinent to note that it is a settled position of law that the due date for payment of contribution is 15 days from the end of the month in which wages are paid in addition to a grace period of 5 days. In view of the settled position, we set aside the decisions of the AO and Ld. CIT(A) on this count and direct the AO to ascertain the amount of contribution made by the assessee within the grace period and allow the same. Accordingly, Ground No. 4 is treated as allowed for statist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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