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TMI Blog2018 (6) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... n allowing the claim of the assessee holding that repairs and renovation expenditure with respect to the shed is revenue in nature Addition on account of technical know-how is fees paid to the parent company - revenue or capital - Held that:- CIT (A) has considered the various clauses of the agreement and held that the know-how was to remain the sole and exclusive property of the provider and the appellant company is required to fully exploit the same. Further the technical know-how was also to be paid in relation to the sales affected by the assessee company. It is also required to be noted that assessee is engaged in the same business for which technical know-how is by the assessee and it is not at its an altogether a new line of business which is developed. The Ld. departmental representative could not point out any infirmity in the order of the Ld. CIT (A). - Decided against revenue - ITA No. 6603/Del/2014 And ITA No. 6923/Del/2014 - - - Dated:- 28-5-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Revenue : Shri Amit Jain, Sr. DR For The Assessee : Shri Shanntosh Kumar Aggarwal, Adv. ORDER PER PRA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. 4. That the conclusions and inferences of the Assessing Officer and / or Commissioner (Appeals) are based on suspicions, conjectures, surmises and extraneous and irrelevant consideration. 5. That the reliefs prayed for may kindly be allowed and the orders(s) of the Assessing Officer and/ or Commissioner (Appeals) may kindly be quashed, set aside, annulled or modified. 4. Assessee is a company engaged in the business of selling of the clothing for pulp paper and board industry. It filed its return of income on 20/9/2009 declaring income of ₹ 1003739/ . Assessment under section 143 (3) of the act was passed on 28/12/2000 at ₹ 121430797/ . The Ld. assessing officer made an addition of ₹ 2038517/ on account of shifting expenses for shifting of boiler and cylinder holding them same to be capital expenditure in nature. The Ld. assessing officer allowed depreciation on it. Further disallowance of ₹ 4059000/ was made on account of repair expenditure to the building holding that these expenditure are capital in nature. Certain other disallowances with respect to the provision of leave encashment and warranty expenditure were also made. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convenient place to vote operation of the arena profitability. It is not the case of the authority deducted the expenditure at by the assessee resulted in bringing into existence of any new state. In the absence of such agreement, we find it difficult to return of finding that any enduring benefit result into the assessee so as to hold that the sifting on capital purposes and thereby the expenditure is capital in nature. The decisions relied upon by the assessee is squarely applicable to the facts of the case and facts of these cases are similar in nature. We therefore hold that mere shifting of boiler from one place to another in the case on hand did not result in creation of any additional and the benefit of the assessee. We, therefore, hold that the expenditure in question is revenue in nature. We, therefore allow ground No. 2. 9. In view of above facts we respectfully following the decision of the coordinate bench allow the ground No. 2 of the appeal of the assessee. 10. The ground No. 3 of the appeal of the assessee was not pressed and hence same is dismissed. 11. In the result appeal of the assessee in ITA No. 6923/del/2014 for assessment year 2009 10 is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s revenue expenditure. Therefore respectfully following the decision of the coordinate bench following the decision of the Hon ble Punjab and Haryana High Court in assessee s own case we find no infirmity in the order of the Ld. CIT (A) in allowing the claim of the assessee holding that repairs and renovation expenditure with respect to the shed is revenue in nature. In the result ground No. 1 and 2 of the appeal of the revenue are dismissed. 16. The 3rd ground in the appeal of the revenue was against the order of the Ld. CIT (A) deleting the addition of ₹ 9819356/ on account of technical know-how is fees paid to the parent company of the assessee which was held by the Ld. AO as capital expenditure and whereas the claim of the assessee is that it is revenue expenditure . 17. The Ld. departmental representative vehemently relied upon the order of the Ld. assessing officer. It was vehemently contested that technical know-how fees paid by the assessee is a capital expenditure in nature the assessee in exploiting it for the purpose of manufacturing of the goods. It was therefore submitted that the technical know-how is purchased by the assessee from its company. 18. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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