9911796707
TMI Blog2023 (3) TMI 1520X X X X Extracts X X X X X X X X Extracts X X X X ..... eciding the issue in the immediately preceding assessment year i.e. assessment year 2015-16 [ 2021 (5) TMI 949 - ITAT DELHI] the Tribunal, in the order referred to above, followed its earlier decision and allowed assessee s claim as held because the amount expended is in relation to the running royalty and not for the purpose of setting up of plant. As decided in in the case of Honda Siel Cars [ 2017 (6) TMI 524 - SUPREME COURT] observed that the Supreme Court has carved out the distinction between the payments at the time of setting up of the manufacturing facility and the payments made once the manufacturing process has already began. In the former case, royalty expenditure for setting up the manufacturing facility is capital in nature wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP. 10.1 That the A.O/Learned DRP have erred in not allowing deduction of expenses of 250,17,14,636/- in respect of Technical know-how in utter disregard to circular no.14(XL-35) dated 11.04.1955. 5. Briefly, the facts relating to this issue are the assessee is a resident corporate entity and is a subsidiary of Honda Motorcycle Co. Ltd., Japan. Basically, assessee is engaged in the business of manufacturing and distribution of motorcycles, scooters etc. in India. 6. In the year under consideration, the assessee had paid Rs.250,17,14,636 towards fee for technical know-how. However, in the return of income, the assessee did not claim it as deduction. 7. In course of assessment proceedings, in submission dated 10.12.2019, the assessee claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, deciding the issue in the immediately preceding assessment year i.e. assessment year 2015-16, the Tribunal, in the order referred to above, followed its earlier decision and allowed assessee s claim. The relevant observations of the Tribunal in this regard are as under: 25. We have carefully considered the rival contention and perused the orders of the lower authorities. The identical claim with respect to the deduction of expenses in respect of technical knowhow arose before the coordinate bench in case of the assessee in ITA number 7463 and 7464/del/2018 for assessment years 2013 14 and 2014 15 wherein at para number six the coordinate bench dealt with this issue. The coordinate bench considered the decision of the coordinate bench in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that the Supreme Court has carved out the distinction between the payments at the time of setting up of the manufacturing facility and the payments made once the manufacturing process has already began. In the former case, royalty expenditure for setting up the manufacturing facility is capital in nature while in the latter case, the royalty expense is revenue in nature. 48. The SLP filed against the said decision has been dismissed by the Hon'ble Supreme Court. Applying the said ratio, we are of the view that the assessee was entitled to claim the aforesaid expenditure as revenue expenditure in the hands of the assessee. 49. Coming to the stand of the Revenue that where the assessee itself had not claimed as deductible in its ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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