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TMI Blog2017 (4) TMI 1596X X X X Extracts X X X X X X X X Extracts X X X X ..... As common grievance is involved in impugned appeals, they were heard together and are disposed of by this common order for the sake of convenience. ITA No. 2046/Ahd/2013 for A.Y. 2010-11 3. The first grievance of the revenue is that the ld. CIT(A) erred in deleting the disallowance of Rs. 88,19,558/- made on account of interest expenses to Naksha Impex . 4. The assessee is manufacturing Pan Masala without tobacco and Pan Masala containing tobacco. The return for the year under consideration was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 5. During the course of the scrutiny assessment proceedings, the A.O. noticed that the assessee has paid interest of Rs. 5.01 crores whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Being convinced with the utilization of money for the purposes of business, the ld. CIT(A) directed the A.O. to delete the addition of Rs. 88,19,558/-. 7. Before us, the ld. D.R. simply relied upon the findings of the A.O. without bringing any factual error in the findings of the ld. CIT(A). There is no dispute that the A.O. has not given any adverse findings so far as utilization of borrowed money from M/s. Naksha Impex is concerned. It is also true that Naksha Impex is not a related party and, therefore, provisions of Section 40A(2)(b) of the Act are not applicable. We agree with the First Appellate Authority that for the purposes of the allowance of interest u/s. 36(1)(iii) of the Act, all that the A.O. has to consider is wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and the submissions, the ld.CIT(A) found that the "Vimal" Trade Mark is owned by M/s. Vishnu & Company Trade Mark Pvt. Ltd. and the assessee has paid royalty @ 6% of its turnover as per the terms and conditions of license/registered user agreement dated 11.05.2007. The ld. CIT(A) further observed that the CBDT circular relied upon by the A.O. does not apply on the impugned payment since there is no acquisition of any technical knowhow; therefore, there is no reason to treat the impugned payment as capital expenditure. The ld. CIT(A) accordingly directed the A.O. to delete the impugned addition. 12. Before us, the ld. D.R. strongly relied upon the findings of the A.O. 13. We have carefully gone through the orders of the authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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