DCIT, New Delhi V. M/s. Precision Pipes & Profiles Co. Ltd., New Delhi

ITA 5331/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2779 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 08-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 30-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: MUKUL BAGLA
• Keywords: Opportunity of being heard; Earning of tax free income; Royalty expenses; Revenue expenditure; Capital expenditure
• Section: 142(1); 14A

Judgement Text

1 ITA NO. 5331/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI S. V. MEHROTRA, VICE PR ESIDENT AND SMT SUCHITRA KAMBLE, JUD ICIAL MEMBER I.T.A .NO.-5331/DEL/2014 (A.Y 2010-11) DCIT CIRCLE-14(1) NEW DELHI (APPELLANT) VS PRECISION PIPES & PROFILES CO. LTD. 54, OKHLA INDUSTRIAL AREA, OKHLA PHASE-II NEW DELHI AAACP5144P (RESPONDENT) APPELLANT BY SH. F. R. MEENA, SR. DR RESPONDENT BY SH. MUKUL BAGLA, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 25/06/2014 PASSED BY THE CIT(A) II, NEW DELHI FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS .. 16,69,884/- MADE BY THE ASSESSING OFFICER U/S 14A OF THE ACT, HOLDIN G THAT RULE 8D(2)(II) CAN BE INVOKED ONLY WHEN THE ASSESSE HAS INCURRED E XPENDITURE BY WAY OF INTEREST WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT, WHICH IS NOT THE CASE HERE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) DATE OF HEARING 08.06.2017 DATE OF PRONOUNCEMENT 04.07.2017 2 ITA NO. 5331/DEL/2014 HAS ERRED IN DELETING THE DISALLOWANCE BY NOT APPRE CIATING THE PROVISIONS OF SUB-RULE 2 OF RULE 8D R.W.S. 14A OF T HE I.T. ACT, 1961. 3. ON THE CAST AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.48,12,352/ - ON ACCOUNT OF DISALLOWANCE OF ROYALTY EXPENSES BY TREATING THE SA ME AS REVENUE EXPENDITURE. 4. ON THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD.CIT(A) HAS ERRED IN DELETING THE ABOVE ADDITION BY RELYING ON THE HONBLE ITAT DECISION IN ASSESSEES OWN CASE IN EARLIER A.Y. IGN ORING THE FACT THE REVENUE HAS FILED REVIEW PETITION BEFORE HONBLE HI GH COURT FOR A.Y. 2005-06 AND THE MATTER IS SUB-JUDICE. 3. RETURN OF INCOME DECLARING RS. 17,91,36,762/- WA S E-FILED BY THE ASSESSEE ON 28.09.2010 WHICH WAS PROCESSED ON 14.07 .2011. THE CASE WAS SELECTED FOR SCRUTINY AND FIRST NOTICE U/S 143(2) O F THE I.T. ACT, 1961 WAS ISSUED ON 24.04.2011 WHICH WAS SERVED UPON THE ASSE SSEE BY SPEED POST. IN RESPONSE TO NOTICES U/S 143 (2) AND 142(1) OF THE I .T. ACT, THE ARS OF THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME , WITH WHOM THE CASE WAS DISCUSSED. THE DETAILS ASKED WAS FILED AND PLACED O N RECORD. DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CON SIDERATION, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SAL E OF AUTOMOTIVE SEALING PARTS TO OEMS LIKE MARUTI SUZUKI INDIA LTD., HONDA CAR INDIA LTD., GENERAL MOTORS PVT.LTD., TOYOTA KIRLOSKAR MOTOR PVT. LTD.. NOTICE U/S 142(1), 143(2) OF THE I.T. ACT ALONG WITH QUESTIONNAIRE WAS ISSUED ON 21.09.2012 FIXING THE CASE FOR 03.10.2012 AND ANOTHER NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED ON 23.11.2012 FIXING THE CASE FOR 30.11.2012 . ANOTHER NOTICE U/S 143(2) OF THE IT ACT, 1961 WAS ISSUED ON 27.08.2012 . THE ASSESSING OFFICER HELD THAT DURING THE YEAR UNDER CONSIDERATION ASSES SEE MADE INVESTMENT OF RS. 20,97,00,616/- AS ON 31.03.2010 AND SHOWN DIVID END INCOME OF RS. 12,17,836/-. THE ASSESSEES CONTENTION THAT EXPENSE S INCURRED TO EARN THE TAX EXEMPT DIVIDEND PROPOSED U/S 14A WAS REJECTED BY TH E ASSESSING OFFICER. THE ASSESSING OFFICER HELD THAT THE EXPENSES NEED NOT B E DIRECTLY ATTRIBUTABLE TO THE TAX FREE INCOME, THEREFORE THE WORD IN RELATIO N TO IS USED IN THE STATUTE. 3 ITA NO. 5331/DEL/2014 THE ASSESSING OFFICER RELIED UPON THE ITAT DECISION IN CASE OF CHEMINVEST LTD. VS. ITO AND REJECTED THE CONTENTION OF THE ASS ESSEE. AS RELATES TO ROYALTY EXPENSES, THE ASSESSING OFFICER HELD THAT ASSESSEE DEBITED RS.2,32,11,529/- TO THE P&L A/C. ON ACCOUNT OF PAYMENT TO COLLABORAT OR/ROYALTY DURING THE FINANCIAL YEAR RELEVANT TO THIS ASSESSMENT YEAR. TH E ASSESSEE MADE PAYMENT TO THE COLLABORATOR I.E. TOKAI KOGYO CO. LTD. THIS INCLUDED A SUM OF RS. 1,92,49,406/- AS PAYMENT OF ROYALTY IN TERMS OF TEC HNICAL COLLABORATION AND LICENSE AGREEMENT ENTERED BETWEEN THE ASSESSEE COMP ANY AND TOKAI KOGYO CO. LTD. THE ASSESSING OFFICER FURTHER HELD THAT AS PER THE AGREEMENT, THE PAYMENT MADE WAS IN LIEU OF TECHNICAL ASSISTANCE BE ING PROVIDED TO THE ASSESSEE WHICH INCLUDED TRAINING AND EDUCATION, TEC HNICAL KNOW-HOW ON THE PRODUCTION METHOD WHICH WAS AN ENDURING BENEFIT DER IVED BY THE ASSESSEE COMPANY. IN VIEW OF THIS, THE ASSESSING OFFICER HEL D THAT ENTIRE EXPENSES COULD NOT BE TREATED AS REVENUE EXPENDITURE AS HELD BY HONBLE SUPREME COURTS DECISION IN THE CASE OF SOUTHERN SWITCHGEAR CO. LTD. VS CIT (232) ITR 259 WHEREIN IT WAS HELD THAT 25% OF THE EXPENSES TO WARDS PAYMENT OF ROYALTY IS TO BE TREATED AS CAPITAL EXPENDITURE. ACCORDINGL Y, THE EXPENSES OF 25% OF RS. 1,92,49,406/- AMOUNTING TO RS.48,12,352/- WERE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSE SSEE. IN RESPECT OF DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D(2) (II), THE CIT(A) HELD AS UNDER:- 3.1. WHILE PASSING THE IMPUGNED ORDER, THE AO NOTE D THAT THE APPELLANT HAD EARNED EXEMPT INCOME OF RS 12,17,836 DURING THE RELEVANT YEAR, BUT HAD NOT DISALLOWED ANY EXPENDITURE PERTAINING TO TH E EXEMPT INCOME. IN RESPONSE TO THE AOS QUERY TO SHOW CAUSE WHY DISALL OWANCE SHOULD NOT BE MADE U/S 14A, THE APPELLANT SUBMITTED IN ITS LET TER DATED 18.03.2013 THAT NO EXPENDITURE HAD BEEN INCURRED ON EARNING TH E EXEMPT DIVIDEND INCOME. IT WAS FURTHER SUBMITTED THAT THE INVESTMEN T IN MUTUAL FUNDS WAS MADE OUT OF FUNDS RECEIVED THROUGH PUBLIC ISSUE IN JANUARY, 2008 AND THAT SINCE THIS DID NOT REPRESENT BORROWED FUNDS, N O DISALLOWANCE WAS WARRANTED OUT OF THE INTEREST PAID BY THE APPELLANT . HOWEVER, THE APPELLANT COMPUTED THE DISALLOWANCE UNDER RULE 8D(2 )(III) AT RS 10,55,223. 4 ITA NO. 5331/DEL/2014 THE AO REJECTED THE CONTENTIONS OF THE APPELLANT AN D NOTED THAT IT HAD AVAILED LOANS AND HAD INCURRED INTEREST EXPENSES TH EREON. NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM BY THE APPELLANT IN RESPECT OF EXPENDITURE RELATING TO THE EXEMPT INCOME, THE AO COMPUTED THE DISALLOWANCE U/S 14A READ WITH RULE 8D AND ARRIVED AT THE DISALLOWANCE O F RS 16,69,884 UNDER RULE 8D(2)(II) AND RS.10,55,223/- UNDER RULE 8D(2)( III). THUS RS 27,25,106 (RS 16,69,884 + RS 10,55,223) WAS DISALLOWED U/S 14 A. 3.2. DURING THE APPELLATE PROCEEDINGS, THOUGH THE GROUNDS OF APPEAL WERE FILED IN RESPECT OF RS 27,25,106 COMPRISING OF RS 1 6,69,884 AND RS 10,55,223, THE AUTHORISED REPRESENTATIVE (AR), THRO UGH THE WRITTEN SUBMISSIONS AND ORAL DISCUSSIONS, OBJECTED ONLY TO THE DISALLOWANCE OF INTEREST UNDER RULE 8D(2)(II), AMOUNTING TO RS 16,6 9,884. THEREFORE, SINCE DISALLOWANCE TO THE EXTENT OF RS. 10,55,223/- IS NO T PRESSED, GROUND 2(A) OF APPEAL TO THAT EXTENT STANDS DISMISSED. 3.4.2. AS REGARDS THE BALANCE SHEET AS ON 31/3/200 8, IT IS SEEN THAT THE APPELLANT HAD INCREASED ITS SHARE CAPITAL BY RS 5 C RORES (FROM RS 9 CRORES AS ON 31/3/2007 TO RS 14 CRORES AS ON 31/3/2008), R ECEIVED SHARE PREMIUM OF RS 70 CRORES AND HAD RESERVES OF RS 4 CR ORES. THE SECURED LOANS INCREASED BY RS 5.31 CRORES AS ON 31/3/2008 ( FROM RS 7.5 CRORES AS ON 31/3/2007 TO RS 12.7 CRORES AS ON 31/3/2008), AN D THE FIXED ASSETS INCREASED BY RS 18.92 CRORES (FROM RS 51.28 CRORES AS ON 31/3/2007 TO RS 70.21 CRORES AS ON 31/3/2008). THE INVESTMENT IN MUTUAL FUNDS APPEARS AT ABOUT RS 56.14 CRORES AS ON 31/3/2008, W HICH STANDS AT RS 20 CRORES AS ON 31/3/2010. 3.4.3. IN THE INSTANT CASE, THE AR HAS DEMONSTRATE D THROUGH THE BANK STATEMENT THAT MUTUAL FUND INVESTMENTS, FROM WHICH THE APPELLANT HAS EARNED EXEMPT INCOME, WERE MADE IN JANUARY AND FEBR UARY, 2008 OUT OF THE FUNDS RECEIVED ON PUBLIC ISSUE OF SHARES IN JAN UARY, 2008 AND THE INTEREST BEARING FUNDS WERE USED FOR ACQUIRING FIXE D ASSETS AND FOR WORKING CAPITAL. 3.4.4 THIS CONCLUSION WAS MADE BY THE AO ALSO WHILE PASSING THE ASSESSMENT ORDER FOR AY 09-10, WHERE THE DISALLOWAN CE U/S 14A WAS 5 ITA NO. 5331/DEL/2014 LIMITED TO THAT MADE UNDER RULE 8D(2)(III) ONLY. NO NEW FINDING HAS BEEN RECORDED BY THE AO WHILE PASSING THE IMPUGNED ORDER SO AS TO UPSET THE ONE MADE IN AY 09- 10. RULE 8D(2)(II) CAN BE INVOKE D ONLY WHEN THE ASSESSEE HAS INCURRED EXPENDITURE BY WAY OF INTERES T WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT, W HICH IS NOT THE CASE HERE. HENCE, NO DISALLOWANCE IS WARRANTED UNDER RULE 8D(2 )(II). 3.4.5. HOWEVER, DISALLOWANCE UNDER RULE 8D(2)(III), WHICH HAS BEEN ACCEPTED BY THE APPELLANT IN AY 09- 10 AND IN THE Y EAR UNDER CONSIDERATION, STANDS AT A DIFFERENT FOOTING SINCE IT PROVIDES FOR APPORTIONMENT ON THE BASIS OF AVERAGE VALUE OF INVE STMENT IN CASE OF INDIRECT EXPENDITURE OTHER THAN INTEREST, AND HENCE DISALLOWANCE TO THE EXTENT OF RS 10,55,223 IS CONFIRMED. GROUND 2 OF TH E APPEAL IS THUS PARTLY ALLOWED. AS RELATES TO ROYALTY EXPENSES, THE CIT(A) HELD AS UNDER: 4.1. WHILE PASSING THE IMPUGNED ORDER, THE AO TREA TED 25% OF THE ROYALTY EXPENDITURE AS CAPITAL EXPENDITURE AND DISALLOWED R S 48,12,352 OUT OF RS 2,32,11,529. HE HELD THAT THE PAYMENT MADE FOR TECH NICAL COLLABORATION AND LICENSE INCLUDED PAYMENT TOWARDS TECHNICAL ASSI STANCE, WHICH IN TURN INCLUDED PAYMENT TOWARDS TRAINING AND EDUCATION. TH E AO WAS OF THE VIEW THAT FOR THESE REASONS PART OF THE PAYMENTS WA S FOR PURPOSES THAT GAVE ENDURING BENEFIT, WHICH WAS NOT ALLOWABLE, BEI NG CAPITAL IN NATURE. RELYING UPON THE DECISION OF MADRAS HIGH COURT IN T HE CASE OF CIT V SOUTHERN SWITCHGEAR LTD 148ITR 272 (MADRAS) WHICH WAS AFFIRMED BY THE HONBLE SUPREME COURT 222ITR 359 (SC), THE AO DISALLOWED 25% OF THE EXPENSES BOOKED BY THE APPELLANT AS ROYALTY EXP ENSES. 4.2. DURING THE APPELLATE PROCEEDINGS, THE AR RELIE D UPON THE ORDERS OF THE HONBLE ITAT IN THE CASE OF THE APPELLANT FOR A Y 05-06, 06-07 AND 08- 09, WHERE IT WAS HELD THAT SINCE ROYALTY WAS DETERM INED ON THE BASIS OF QUANTITY AND VALUE OF PRODUCTION (WORKED OUT AT 2% OF THE ITEMS MANUFACTURED AND SOLD UNDER THE AGREEMENT), THE EXP ENDITURE INCURRED WAS ESSENTIALLY OF RECURRING AND REVENUE IN NATURE . IT WAS ALSO NOTED THAT THE ASSESSEE HAD ADMITTED THAT PAYMENT WAS NOT BEING MADE FOR 6 ITA NO. 5331/DEL/2014 ACQUIRING PROCESS OR DESIGN OR TECHNOLOGY WHICH CA N BE UTILIZED BY THE ASSESSEE IN THE YEARS TO COME AND THE ASSESSEE COMP ANY WAS NOT DERIVING ANY BENEFIT OF ENDURING NATURE. THE AR OB JECTED TO THE APPLICATION OF SOUTHERN SWITCHGEAR (SUPRA) BY THE AO, STATING THAT THE FACTS IN THE CASE OF THE APPELLANT WERE AT VARIANCE . IT WAS ALSO STATED THAT OUT OF THE TOTAL PAYMENT OF RS 2,32,11,529, RS 1,92 ,49,406 PERTAINED TO ROYALTY AND THE BALANCE WAS ON ACCOUNT OF EXPENDITU RE INCURRED ON TRAVELS, HOTELS AND ACCOMMODATION CHARGES OF VISITI NG CONSULTANTS. 4.3. THE SUBMISSIONS OF THE APPELLANT ARE CONSIDERE D. THE ROYALTY EXPENSES IN THE RELEVANT YEAR RELATE TO THE AGREEME NT IN RESPECT OF WHICH THE HONBLE ITAT HAS HELD THE PAYMENTS TO BE RECUR RING AND REVENUE IN NATURE. THEREFORE, IN VIEW OF THE SPECIFIC FINDING S OF THE HONBLE ITAT FOR AY 05-06, 06-07 AND 08-09, THE ADDITION MADE BY THE AO IS DELETED. GROUND 3 OF THE APPEAL IS ALLOWED. 5. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AND SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE M ADE INVESTMENT OF RS. 20,97,00,616/- AS ON 31.03.2010 AND SHOWN DIVIDEND INCOME OF RS. 12,17,836/-. THE LD. DR FURTHER SUBMITS THAT THE EX PENSES NEED NOT BE DIRECTLY ATTRIBUTABLE TO THE TAX FREE INCOME. THUS, THE ASSESSING OFFICER RIGHTLY DISALLOWED RS. 16,68,884 UNDER RULE 8D(2)(II). AS R ELATES TO GROUND NO. 3 AND 4, THE DR COULD NOT DISTINGUISH THE FACTS OF THE PR ESENT ASSESSMENT YEAR AND THE EARLIER ASSESSMENT YEARS WHERE THE ITAT HAS DEC IDED THE ISSUE OF ROYALTY EXPENSES IN FAVOUR OF THE ASSESSEE. 6. THE LD. DR RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE MATERIAL AVAILABLE ON RECORDS. THE ASSESSING OFFICER AND THE CIT(A) HAS NOT GIVEN A PARTICULAR FINDING ABOUT THE INVESTMENTS. THE CIT(A) HAS ONLY MADE OBSERVATION THAT THE CONCLUSION MADE BY THE AO WHILE PASSING THE ASSESSM ENT ORDER FOR AY 09-10, WHERE THE DISALLOWANCE U/S 14A WAS LIMITED TO THAT MADE UNDER RULE 8D(2)(III) ONLY AND THERE WAS NO NEW FINDING RECORDED BY THE A O WHILE PASSING THE PRESENT ASSESSMENT ORDER. THE CIT(A) HAS NOT AT ALL TAKEN THE COGNIZANCE 7 ITA NO. 5331/DEL/2014 ABOUT THE PARTICULARS OF INVESTMENT AND ITS EXPENSE S WHILE OBSERVING THAT RULE 8D(2)(II) CAN BE INVOKED ONLY WHEN THE ASSESSE E HAS INCURRED EXPENDITURE BY WAY OF INTEREST WHICH IS NOT DIRECTLY ATTRIBUTAB LE TO ANY PARTICULAR INCOME OR RECEIPT, WHICH IS NOT THE CASE HERE. HENCE, NO DISA LLOWANCE IS WARRANTED UNDER RULE 8D(2)(II). THUS, GROUND NO. 1 & 2 NEEDS TO BE LOOK INTO AND RE MITTED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. N EEDLESS TO SAY THE ASSESSEE BE GIVEN OPPORTUNITY TO BE HEARD. AS RELATES GROUND NO . 3 & 4, THE SAME IS COVERED IN ASSESSEES OWN CASE, FOR ASSESSMENT YEAR 2005-06, 2006-07 & 2008-09 AND 2007-08 & 09-10 IN ITA NO. 374/DEL/2009 A.Y. 2005-06 DATED 30.04.2010, ITA NO. 4257 & 4258/DEL/2012 IN A.Y. 20 06-07 & 2008-09 AND ITA NO. 5276 & 5275/DEL/2013 IN A.Y. 2009-10 & 2007 -08. THE EXTRACT OF THE ITAT ORDER IN A.Y. 2009-10 & 2007-08 IS AS FOLL OWS: 4. WE HAVE TAKEN OURSELVES THROUGH THE ORDERS OF T HE CO-ORDINATE BENCH WHICH HAVE BEEN FILED AND SEEN THAT THE FIND ING GIVEN IN THE LEAD ORDER FOR 2005-06 ASSESSMENT YEAR, HAS BEEN FOLLOWE D IN 2006-07 AND 2008-09 ASSESSMENT YEARS. THE RELEVANT FINDING IS E XTRACTED HEREUNDER:- WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE TERMS AND CONDITIONS OF THE AGREEMENT INTO BY THE ASSESSE E. WE FOUND THAT ASSESSEE WAS REQUIRED TO PAY ANNUALLY ROYALTY AT TH E RATE OF 2% OF THE ITEMS MANUFACTURED UNDER THIS AGREEMENT AND SOLD DU RING THE TERM OF THE SAID AGREEMENT. SUCH ROYALTY TO BE COMPUTED ON HALF YEARLY BASIS. AS THE ROYALTY PAYMENT IS DETERMINED ANNUALLY ON TH E BASIS OF QUANTITY AND VALUE OF PRODUCTION, THE EXPENDITURE SO INCURRE D BY THE ASSESSEE IS ESSENTIALLY RECURRING AND REVENUE IN NATURE. HOWEVE R, THE AO HAS TREATED 25% OF SUCH PAYMENT AS CAPITAL IN NATURE. T HE EXPENDITURE SO CLAIMED IS CHARGED ON THE PRODUCTS MANUFACTURED BY THE ASSESSEE COMPANY AND THE SAME IS NOT INCURRED FOR ACQUIRING A PROCESS OR DESIGN OR TECHNOLOGY WHICH CAN BE UTILIZED BY THE ASSESSEE FOR YEARS TO COME SO AS TO CATEGORIZE SUCH EXPENDITURE, AS CAPITAL IN NATURE. NOTHING WAS BROUGHT ON RECORD BY THE LEARNED DR TO CONTROVERT T HE FINDINGS OF THE CIT(A) RECORDED AT PAGES 5 & 6 OF APPELLATE ORDER. WE THEREFORE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR ALLOWING THE ENTIRE PAYMENT OF ROYALTY AS REVENUE EXPENDITURE. 8 ITA NO. 5331/DEL/2014 4.1 CONSIDERING THE FACT THAT IDENTICAL ISSUE IN 20 05-06, 2006-07 & 2008-09 ASSESSMENT YEARS HAVE BEEN FOLLOWED AND THE YEARS UNDER CONSIDERATION ARE INTERVENING YEARS AND NOTING THAT THERE IS NO CHANGE IN FACTS, CIRCUMSTANCES OR POSITION OF LAW, WE HOLD TH AT THE DEPARTMENTAL APPEALS HAVE NO MERIT. THE SAME ARE ACCORDINGLY DIS MISSED. THE SAID ORDER WAS PRONOUNCED IN THE PRESENCE OF THE PARTIES . THUS, THE ISSUE OF ROYALTY EXPENSES IS COVERED IN FAVOUR OF THE ASSESSEE IN EARLIER YEARS. 8. IN RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH JULY, 2017. SD/- SD/- (S. V. MEHROTRA) (SUCHITRA KAMBLE) VICE PRESIDENT JUDICI AL MEMBER DATED: 04/07/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 9 ITA NO. 5331/DEL/2014 DATE 1. DRAFT DICTATED ON 08/06/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 08/06/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 04.07.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 04.07.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.