2015 (7) TMI 740

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..... computer peripherals for more than 180 days in the relevant previous year. However, no such factual determination appears to have been undertaken either by the Assessing Officer (AO) or, at the instance of Revenue, at any of the subsequent stages. Consequently, the Court finds no merit in the contention of the Appellant as regards the issue of depreciation. - Decided against revenue. Fees and royalties for technical knowhow - whether be treated as revenue/business expenditure? - Held that:- A perusal of the TCA shows that the payment by the Assessee to SMCL is for the technical knowhow given to the Assessee as a Licensee. Although the payment is spread over a period of 10 years, it does not make the Assessee the owner of the technical k .....

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..... ss the assessee was able to show that the concerned UPS and computer peripherals have been used for more than 180 days in the previous year, it could not have claimed higher rate of depreciation @ 60%. The Court finds that the above ground urged by the Revenue ought to have been based on the factual determination as to whether with reference to the actual dates of purchase of the concerned UPS and computer peripherals, it could be demonstrated that the assessee could not have used such UPS and computer peripherals for more than 180 days in the relevant previous year. However, no such factual determination appears to have been undertaken either by the Assessing Officer (AO) or, at the instance of Revenue, at any of the subsequent stages. Con .....

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..... estion was answered by the AO against the Assessee. Aggrieved by the said order, the Assessee appealed to the CIT (Appeals). A specific issue before the CIT (Appeals) was the justification for the AO having added the amount paid by the Assessee to SMCL on account of royalty and fees for technical assistance. CIT (Appeals) came to the conclusion that by incurring the said expenditure, no benefit was obtained by the Assessee for the period beyond the relevant assessment years. It was a periodical payment linked to the annual turnover and did not constitute capital expenditure for the reason that it was incurred for obtaining selling/servicing rights under Clause 6 of the Agreement and, therefore, did not provide any benefit of enduring nature .....

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