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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 ..... 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 whether the money borrowed is utilized for the purposes of business or not. Since, no adverse findings is given, we decline to interfere with the findings of the ld. CIT(A). Nature of expenditure - payment paid to Vishnu Company Trade Mark Pvt. Ltd. for use of trade mark - revenue or capital expenditure - HELD THAT:- There is no dispute that the Vimal Trade Mark is owned by Vishnu Company Trade Mark Pvt. Ltd. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 which included interest of Rs. 4.70 crores paid on unsecured loans from the bank and others. The A.O. further found that though the assessee has paid interest to the parties @ 12% but has paid interest to M/s. Naksha Impex @ 15% and 18%. The A.O. was of the opinion that the interest paid to Naksha Impex was quite higher than the rate of interest paid to bank as well as paid on other unsecured loans. Accordingly, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 whether the money borrowed is utilized for the purposes of business or not. Since, no adverse findings is given, we decline to interfere with the findings of the ld. CIT(A). Ground no. 1 is accordingly dismissed. 8. The second grievance of the revenue relates to the deletion of the addition of Rs. 5,32,83,949/- made on account of payment paid to Vishnu Company Trade Mark Pvt. Ltd. for use of trade mark whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 authorities below and the relevant documentary evidences brought on record in the form of a paper book. There is no dispute that the Vimal Trade Mark is owned by Vishnu Company Trade Mark Pvt. Ltd. It is also true that the assessee has paid the royalty as per the terms and conditions of the registered agreement. It is equally true that the CBDT circular No. 10/69/61-IT(AI) dated 04.09.1962 is not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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