w w w . L a w y e r S e r v i c e s . i n



Telco Construction Co. Ltd. v/s Asst Commissioner of Income-Tax, Bangalore


Company & Directors' Information:- L & W CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201KA2006PTC039095

Company & Directors' Information:- N H CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201DL2006PTC144604

Company & Directors' Information:- C S CONSTRUCTION COMPANY PRIVATE LIMITED [Active] CIN = U45201DL2005PTC140236

Company & Directors' Information:- S D CONSTRUCTION PVT LTD [Active] CIN = U45209WB1993PTC058947

Company & Directors' Information:- M K R CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201DL2003PTC121828

Company & Directors' Information:- R K CONSTRUCTION PVT LTD [Strike Off] CIN = U00500BR1984PTC001953

Company & Directors' Information:- T D CONSTRUCTION COMPANY PRIVATE LIMITED [Active] CIN = U70101AS2002PTC006719

Company & Directors' Information:- M I A CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45204DL2013PTC248344

Company & Directors' Information:- H N CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200JH2007PTC012923

Company & Directors' Information:- L V CONSTRUCTION COMPANY PRIVATE LIMITED [Active] CIN = U45201UP1998PTC023382

Company & Directors' Information:- A G L CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400WB2008PTC126885

Company & Directors' Information:- C. K. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U00501BR1990PTC003909

Company & Directors' Information:- CONSTRUCTION INDIA PVT LTD [Active] CIN = U45201GJ1979PTC003375

Company & Directors' Information:- H R CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201UP2002PTC026867

Company & Directors' Information:- M B N CONSTRUCTION PRIVATE LIMITED [Active] CIN = U70101AS2004PTC007322

Company & Directors' Information:- V K B S CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1989PTC035435

Company & Directors' Information:- N J CONSTRUCTION PRIVATE LIMITED [Active] CIN = U70102WB2012PTC186978

Company & Directors' Information:- C S R CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1994PTC060034

Company & Directors' Information:- T M G CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45203UP2000PTC025597

Company & Directors' Information:- C D S CONSTRUCTION CO PVT LTD [Active] CIN = U45200MH1982PTC026703

Company & Directors' Information:- P J CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201AS2000PTC006365

Company & Directors' Information:- A R C CONSTRUCTION PVT LTD [Active] CIN = U45202MH1996PTC096950

Company & Directors' Information:- N B S A M CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201DL2005PTC143267

Company & Directors' Information:- J M D CONSTRUCTION PVT LTD [Strike Off] CIN = U70101WB1993PTC057456

Company & Directors' Information:- S R K CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45200BR1998PTC008483

Company & Directors' Information:- V & C CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1992PTC049012

Company & Directors' Information:- S B CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45203OR1994PTC003672

Company & Directors' Information:- O A CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45203AR2005PTC007930

Company & Directors' Information:- J C CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45203AS1999PTC005975

Company & Directors' Information:- N A CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200MH2009PTC192764

Company & Directors' Information:- N CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201DL2006PTC146888

Company & Directors' Information:- V. K. CONSTRUCTION COMPANY PVT. LTD. [Active] CIN = U45102WB1991PTC050570

Company & Directors' Information:- M M CONSTRUCTION PVT LTD [Strike Off] CIN = U45200GJ1995PTC027508

Company & Directors' Information:- P. L. G. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400DL2007PTC171110

Company & Directors' Information:- L AND C CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201KA2001PTC028456

Company & Directors' Information:- C R CONSTRUCTION PVT LTD [Active] CIN = U45209WB1960PTC024811

Company & Directors' Information:- J S CONSTRUCTION PVT LTD [Active] CIN = U45201OR1981PTC000921

Company & Directors' Information:- S H A CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45202DL1996PTC076831

Company & Directors' Information:- S N S CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45204HR2009PTC039160

Company & Directors' Information:- A V M CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45202GJ2007PTC050521

Company & Directors' Information:- M P J CONSTRUCTION (INDIA) PRIVATE LIMITED [Strike Off] CIN = U45400HR2011PTC044433

Company & Directors' Information:- A H CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201TN1990PTC019675

Company & Directors' Information:- A R S S V CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45202UR2020PTC011198

Company & Directors' Information:- A D CONSTRUCTION CO PRIVATE LIMITED [Strike Off] CIN = U45201UP1984PTC006464

Company & Directors' Information:- G V G CONSTRUCTION PRIVATE LIMITED [Active] CIN = U70102TN2009PTC072766

Company & Directors' Information:- D G CONSTRUCTION PRIVATE LIMITED [Active] CIN = U70102JH2012PTC000717

Company & Directors' Information:- N. B. Y. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201HR2019PTC079172

Company & Directors' Information:- J B F CONSTRUCTION COMPANY PRIVATE LIMITED [Active] CIN = U45200JK2008PTC002952

Company & Directors' Information:- K R P CONSTRUCTION PVT LTD [Active] CIN = U45200MH1989PTC053580

Company & Directors' Information:- R S M CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201DL2005PTC142245

Company & Directors' Information:- R & S CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201BR2012PTC018727

Company & Directors' Information:- B M S CONSTRUCTION PRIVATE LIMITED [Active] CIN = U70101WB2006PTC110196

Company & Directors' Information:- E H CONSTRUCTION CO PVT LTD [Active] CIN = U45209WB1984PTC037174

Company & Directors' Information:- N AND K CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45500CT2020PTC010948

Company & Directors' Information:- A C K CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45203PN2002PTC017065

Company & Directors' Information:- D. M. CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U74140WB2000PTC091230

Company & Directors' Information:- B M CONSTRUCTION CO PVT LTD [Strike Off] CIN = U70101WB1987PTC043414

Company & Directors' Information:- S K L CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201OR2012PTC016144

Company & Directors' Information:- P D CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201MH2007PTC171650

Company & Directors' Information:- A M CONSTRUCTION P LTD. [Active] CIN = U99999WB1990PTC050255

Company & Directors' Information:- P B S CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201WB2004PTC099367

Company & Directors' Information:- J B M CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45209WB2008PTC124938

Company & Directors' Information:- S. Z. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74999WB2011PTC163934

Company & Directors' Information:- P K S CONSTRUCTION CO PRIVATE LIMITED [Active] CIN = U45200HP2004PTC027694

Company & Directors' Information:- H D G CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1988PTC032183

Company & Directors' Information:- S R B CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201DL2004PTC130817

Company & Directors' Information:- N T C CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201KL2001PTC014853

Company & Directors' Information:- S. P. CONSTRUCTION INDIA PRIVATE LIMITED [Active] CIN = U70100WB2019PTC233077

Company & Directors' Information:- S A M CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200HR2020PTC088988

Company & Directors' Information:- C S CONSTRUCTION INDIA PRIVATE LIMITED [Active] CIN = U45200MH2020PTC346811

Company & Directors' Information:- G B CONSTRUCTION COMPANY PVT LTD [Strike Off] CIN = U74210PB1995PTC016038

Company & Directors' Information:- A K CONSTRUCTION CO PVT LTD [Active] CIN = U45400WB1983PTC035682

Company & Directors' Information:- D. D. A. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201JH2008PTC013043

Company & Directors' Information:- K. G. G. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400MN2010PTC008256

Company & Directors' Information:- G N B B CONSTRUCTION PRIVATE LIMITED [Active] CIN = U70101AS2004PTC007418

Company & Directors' Information:- H. N. D. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200JH2011PTC015162

Company & Directors' Information:- M E CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45200DL2007PTC171643

Company & Directors' Information:- C S COMPANY CONSTRUCTION LIMITED [Active] CIN = U45201KL1997PLC011174

Company & Directors' Information:- L K I CONSTRUCTION PVT LTD [Active] CIN = U70101WB1993PTC058304

Company & Directors' Information:- S K CONSTRUCTION PVT LTD [Active] CIN = U45201WB1994PTC065714

Company & Directors' Information:- D T M CONSTRUCTION PVT LTD [Active] CIN = U45201WB1978PTC031730

Company & Directors' Information:- D L CONSTRUCTION PVT LTD [Strike Off] CIN = U45400WB1982PTC035570

Company & Directors' Information:- S V G CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1994PTC055629

Company & Directors' Information:- M N P CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200MH1980PTC022351

Company & Directors' Information:- A H A CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400UP2010PTC040773

Company & Directors' Information:- S T S CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U60109WB1996PTC081825

Company & Directors' Information:- J J CONSTRUCTION PVT. LTD [Strike Off] CIN = U45200WB1989PTC046714

Company & Directors' Information:- D P CONSTRUCTION PVT LTD [Strike Off] CIN = U70101WB1987PTC042320

Company & Directors' Information:- B B G CONSTRUCTION PVT LTD [Strike Off] CIN = U45201WB1993PTC059618

Company & Directors' Information:- G S CONSTRUCTION PVT LTD [Strike Off] CIN = U45201WB1994PTC063238

Company & Directors' Information:- P S S S K CONSTRUCTION CO PVT LTD [Strike Off] CIN = U45201WB2006PTC107993

Company & Directors' Information:- S E CONSTRUCTION PVT LTD [Strike Off] CIN = U45202WB1988PTC044630

Company & Directors' Information:- H K CONSTRUCTION PVT LTD [Active] CIN = U45201GJ1981PTC004160

Company & Directors' Information:- A V CONSTRUCTION CO PVT LTD [Active] CIN = U45202PB1982PTC004971

Company & Directors' Information:- G N CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45202OR2000PTC006244

Company & Directors' Information:- D P T CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45202MH2001PTC131559

Company & Directors' Information:- J CONSTRUCTION INDIA PRIVATE LIMITED [Active] CIN = U45200TZ2012PTC018250

Company & Directors' Information:- N B S D CONSTRUCTION PVT. LTD. [Strike Off] CIN = U45201WB1993PTC058364

Company & Directors' Information:- S K E CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45202JH2012PTC000666

Company & Directors' Information:- A K G CONSTRUCTION PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U45201DL2005PTC134347

Company & Directors' Information:- L J CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL2005PTC142321

Company & Directors' Information:- R H P CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U45203MP2001PTC014739

Company & Directors' Information:- R AND M CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U45202UP1994PTC017286

Company & Directors' Information:- B AND R CONSTRUCTION PVT LTD [Strike Off] CIN = U45201AS1990PTC003431

Company & Directors' Information:- J K CONSTRUCTION PVT LTD [Strike Off] CIN = U74210OR1987PTC001858

Company & Directors' Information:- B T CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U70101WB1997PTC085448

Company & Directors' Information:- P V CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U70100DL1998PTC097116

Company & Directors' Information:- M T CONSTRUCTION PVT LTD [Strike Off] CIN = U26933OR1985PTC001496

Company & Directors' Information:- A K CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U29248UR1982PTC005795

Company & Directors' Information:- P B CONSTRUCTION (INDIA) LIMITED [Strike Off] CIN = U01131TN1995PLC032650

Company & Directors' Information:- S K P CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201CT2008PTC020585

Company & Directors' Information:- A P G CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U45400DL2007PTC168160

Company & Directors' Information:- B. CONSTRUCTION PVT. LTD. [Strike Off] CIN = U00894BR1989PTC003616

Company & Directors' Information:- Y S K CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201DL2005PTC134417

Company & Directors' Information:- P K A S CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U74899DL2005PTC138117

Company & Directors' Information:- R G M CONSTRUCTION PRIVATE LIMITED [Under Process of Striking Off] CIN = U45200BR1992PTC004863

Company & Directors' Information:- A TO Z CONSTRUCTION CO PRIVATE LTD [Strike Off] CIN = U70101DL1987PTC029674

Company & Directors' Information:- O S CONSTRUCTION PVT LTD [Strike Off] CIN = U00351JH1990PTC003764

Company & Directors' Information:- D I CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1994PTC061454

Company & Directors' Information:- P N CONSTRUCTION PRIVATE LIMITED [Converted to LLP] CIN = U45201DL2003PTC122894

Company & Directors' Information:- A + E CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1990PTC042290

Company & Directors' Information:- S N CONSTRUCTION PVT LTD [Strike Off] CIN = U45203OR1983PTC001211

Company & Directors' Information:- P N R CONSTRUCTION PVT LTD [Strike Off] CIN = U99999MH2006PTC158802

Company & Directors' Information:- J. K. D. CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45209PB2009PTC033102

Company & Directors' Information:- B H CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200MH2009PTC193976

Company & Directors' Information:- K L G CONSTRUCTION INDIA PRIVATE LIMITED [Strike Off] CIN = U45201MH2015PTC264933

Company & Directors' Information:- J W CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400MH2010PTC198916

Company & Directors' Information:- U N CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400PN2014PTC150730

Company & Directors' Information:- G T K CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45200MH1996PTC096261

Company & Directors' Information:- J B CONSTRUCTION PVT LTD [Strike Off] CIN = U45200MH2004PTC025668

Company & Directors' Information:- U S CONSTRUCTION AND COMPANY PRIVATE LIMITED [Strike Off] CIN = U45200MH2004PTC149583

Company & Directors' Information:- R M J CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U70102UP2010PTC040949

Company & Directors' Information:- M V CONSTRUCTION COMPANY PVT LTD [Strike Off] CIN = U45400WB1967PTC011413

Company & Directors' Information:- A P L CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U45209HP2010PTC031395

Company & Directors' Information:- H AND K CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U70200HP2014PTC000633

Company & Directors' Information:- I. A. A. CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45204DL2011PTC220447

Company & Directors' Information:- R M D CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400DL2008PTC185164

Company & Directors' Information:- A R M CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400DL2008PTC185770

Company & Directors' Information:- G-5 CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400DL2014PTC265907

Company & Directors' Information:- U P CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400DL2014PTC271791

Company & Directors' Information:- V 2 S CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400DL2014PTC273750

Company & Directors' Information:- A T N CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45400DL2015PTC288656

Company & Directors' Information:- I G CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U45201DL1996PTC077365

Company & Directors' Information:- P P S CONSTRUCTION COMPANY PRIVATE LIMITED [Active] CIN = U45201DL2005PTC138608

Company & Directors' Information:- S S N V CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201DL2005PTC142918

Company & Directors' Information:- K. C. CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201DL2012PTC231726

Company & Directors' Information:- N R D CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201DL2012PTC244905

Company & Directors' Information:- S A Z CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U70102DL2014PTC267130

Company & Directors' Information:- A & Z CONSTRUCTION CO. PRIVATE LIMITED [Strike Off] CIN = U70101DL2012PTC231712

Company & Directors' Information:- J M M CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45200BR2014PTC021845

Company & Directors' Information:- B & U CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45203GJ2013PTC075424

Company & Directors' Information:- U. A. CONSTRUCTION PRIVATE LIMITED [Active] CIN = U45201HR2020PTC086153

Company & Directors' Information:- C P CONSTRUCTION PVT LTD [Strike Off] CIN = U70101WB1988PTC043759

Company & Directors' Information:- K P CONSTRUCTION (INDIA) PVT LTD [Strike Off] CIN = U74210WB1985PTC039394

Company & Directors' Information:- T K CONSTRUCTION PVT LTD [Strike Off] CIN = U74210WB1985PTC039731

Company & Directors' Information:- A P S CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45201BR1986PTC002374

Company & Directors' Information:- A B G S CONSTRUCTION PVT LTD [Strike Off] CIN = U45201WB1986PTC040667

Company & Directors' Information:- G B S S CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U45201PN2000PTC015546

Company & Directors' Information:- B P CONSTRUCTION CO PVT LTD [Strike Off] CIN = U95201WB1955PTC022488

Company & Directors' Information:- A R CONSTRUCTION PVT LTD [Strike Off] CIN = U45201CH1988PTC008459

Company & Directors' Information:- A S G CONSTRUCTION CO. PRIVATE LIMITED [Strike Off] CIN = U70200DL1996PTC075278

Company & Directors' Information:- W & C CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45209PN2006PTC129169

Company & Directors' Information:- T & A CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400DL2007PTC164939

Company & Directors' Information:- S R S S CONSTRUCTION PRIVATE LIMITED [Strike Off] CIN = U45400DL2008PTC176504

Company & Directors' Information:- B C R CONSTRUCTION PRIVATE LIMITED [Active] CIN = U99999MH1979PTC021005

Company & Directors' Information:- THE CONSTRUCTION CO OF INDIA LTD. [Dissolved] CIN = U99999MH1943PLC007425

Company & Directors' Information:- S B CONSTRUCTION CO LTD [Strike Off] CIN = U45208WB1947PLC014904

    Income Tax Appeal No. 101 of 2016

    Decided On, 20 November 2020

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE ALOK ARADHE & THE HONOURABLE MR. JUSTICE H.T. NARENDRA PRASAD

    For the Appearing Parties: Jinitha Chatterjee, S. Parthasarathi, K.V. Aravind, Advocates.



Judgment Text

Alok Aradhe, J.This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2008-09. The appeal was admitted by a bench of this Court vide order dated 10.08.2016 on the following substantial question of law:(i) Whether the royalty payment for user of technical know-how and intellectual property rights along with the right to manufacture for a temporary period was required to be considered as revenue expenditure and to be allowed under Section 37(1) of the Act.(ii) Whether the Tribunal was right in upholding the view of the assessing officer that the expenditure towards royalty was a capital expenditure as the user of rights by way of know-how, intellectual property had resulted in enduring benefit to the Appellant when there was no acquisition of any capital asset.2. Facts leading to filing of this appeal briefly stated are that the assessee is a company engaged in the business of manufacture, purchase and sale of hydraulic excavators, loaders, mechanical shovels, cranes and spare parts thereof. The assessee filed its return of income on 29.09.2008 for the Assessment Year 2008-09 declaring total income of Rs.483,41,12,190/-. The assessee claimed deduction on account of payment of royalty made by it to M/s Hitachi Construction Machinery Company Private Limited, Japan at the rate of 1% of the net factory selling price to the extent of Rs.91,06,005/- under Section 37(1) of the Act. The aforesaid amount was paid for use of technical know-how and grant of rights for manufacture of Hitachi licence products, which included intellectual property. It is the case of the assessee that the aforesaid amount has been used for the purposes of business of the assessee and therefore, the claim for deduction under Section 37(1) of the Act is permissible.3. The Assessing Officer made an instruction by visiting the manufacturing and research and development units of the assessee at Telcon premises at Jamshedpur in the State of Jharkhand and was of the opinion that know how including intellectual property of Hitachi Construction Machinery Company Private Limited was used in 6 models to develop and indigenize the products to suit the Indian market. It was held that as per the agreement between the parties, there was no payment in lumpsum and royalty was payable at the rate of 1% of the net factory selling price and the royalty was required to be paid in respect of each of new Hitachi licence products sold by the assessee for a period of 7 years from the date of commencement of commercial production or ten years from the execution of the agreement, whichever is earlier. The Assessing Officer by an order dated 30.12.2011 inter alia concluded that the payment was made for acquiring a right, which provided enduring benefit and held that the same was a capital expenditure, which creates acquisition of right in the use of technical know-how and grant of rights for manufacture of licence, which include intellectual property. Accordingly, the claim of deduction under Section 37(1) of the Act was disallowed.4. The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appeals) who by an order dated 14.02.2014 inter alia held that the very fact that royalty payment is a percentage of sales clarifies that the nature of expenses is revenue as the link to the actual sales, which determines the quantum of payment. It was also held that the assessee under no circumstances would be in a position to transfer the rights. Thus, the Commissioner of Income Tax (Appeals) held that the assessee is entitled to allowance of deduction of Rs.91,06,005/- as the same is revenue expenditure under Section 37(1) of the Act.5. The revenue thereupon filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The tribunal by an order dated 23.09.2015 inter alia held that the rights obtained for manufacture of licence products and also user of technical know-how and intellectual property which was provided to the assessee would give an enduring benefit to the assessee and therefore, the expenditure should be held as capital expenditure. Accordingly, the order passed by the Commissioner of Income Tax (Appeals) was reversed and the order passed by the Assessing Officer was restored. In the aforesaid factual background, the assessee has filed this appeal.6. Learned counsel for the assessee submitted that assessee is an existing manufacturing unit and no new unit was set up for manufacturing a new product after obtaining the licence to use the technical knowhow from the Hitachi. It is further pointed out that the aforesaid fact was verified by the Assessing Officer as well as Commissioner of Income Tax (Appeals) and it was not disputed by the tribunal. It is also pointed out that in terms of the technology licence agreement executed by the assessee for a limited period of using technical know-how for a period of seven years and taking into account the fact that the payment was based on percentage of net sale, the same ought to have been treated as revenue expenditure and not capital expenditure as there was no transfer of rights on the product / technical know-how and therefore, the licence to use the technical know-how could not have been treated as capital asset. It is also urged that the payment of royalty made by the assessee do not fall within the purview of capital asset as defined under Section 2(14) of the Act. It is also contended that rights are to be considered as capital asset only in case of an Indian company, whereas, in the instant case, the company with whom the assessee had entered into an agreement was not an Indian Company but was a company governed by the laws of Japan. It is also submitted that tribunal failed to appreciate that every licence obtained on which royalty was being paid, there was an enduring benefit, but the same did not result in any acquisition of any capital asset to consider the expenditure as capital expenditure. In support of aforesaid submissions, reliance has been placed on the decisions in 'CIT VS. CIBA OF INDIA LTD, (1968) 69 ITR 692', CIT VS. I.A.E.C. (PUMPS) LTD, (1998) 232 ITR 316', 'PCIT VS. WESTERN AGRI SEEDS LTD', 'CIT VS. J.K.SYNTHETICS LTD, (2009) 309 ITR 371', 'CLIMATE SYSTEMS INDIA LTD. VS. CIT, (2009) 319 ITR 113', 'CIT VS. ASHOKA MILLS LTD, (1996) 218 ITR 526, CIT VS. HERBALIFE INTERNATIONAL INDIA PVT. LTD.', ITA NO.3/2009 and 'CIT VS. LUWA INDIA LTD,75 DTR 367.7. On the other hand, learned counsel for the revenue submitted that the assessee came into existence by virtue of technical licence agreement and therefore, payment under the agreement is capital expenditure. In this connection, our attention has been invited to Clause (b) as well as Clauses 2.1 and 2.2 of the agreement. It is also pointed out that the know how remains with the assessee even after the expiry of the royalty period and there is no obligation under the agreement to return the same. It is argued that the amount of royalty paid by the assessee is capital expenditure and know how provided under the agreement is acquisition of intangible asset having enduring benefit and the finding of the tribunal is based on appreciation of material available on record and the assessee has neither pleaded nor has proved any perversity in the finding recorded by the tribunal, which is a finding of fact. In support of aforesaid submissions, reliance has been placed on decision of the Supreme Court in 'HONDA SIEL CARS INDIA LTD. VS. COMMISSIONEROF INCOME-TAX, GHAZIABAD,2017 82 TAXMANN.COM 212 (SC).8. We have considered the submissions made by learned counsel for the parties and have perused the record. Section 2(14) of the Act defines the expression capital asset to mean property of any kind held by an assessee whether or not connected with his business or profession. Section 2(14) defines the expression 'capital asset' exhaustively. An explanation is appended to Section 2(14), which provides that for removal of doubts it is hereby clarified that property includes and shall be deemed to have always included any rights in or in relation to an Indian company, including rights of management or control or any other rights whatsoever. The aforesaid explanation is inclusive and explains the meaning of the property and in no way restricts the meaning of the expression 'property'. Section 37(1) of the Act provides for deduction of any expenditure not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purposes of business or profession shall be allowed in computing the income chargeable under the head 'profits and gains of business or profession'.9. It is well settled in law that distinction between capital and revenue expenditure with reference to acquisition of technical information and know-how has been spelled out in various cases and the primary test to ascertain whether a expenditure is a capital expenditure or revenue expenditure is the same viz., enduring nature test, which means where the expenditure is incurred which gives enduring benefit, it will be treated as capital expenditure. The aforesaid view has been taken by Ciba India Ltd. supra and aforesaid principle was reiterated in Honda Siel Cars India Ltd. supra.10. In the instant case, before proceeding further it is apposite to take note of the relevant clauses of the Technical Licence Agreement viz., Clause (b), Clause 1.13, 2.2, 2.4, 11.1, 15.2, and 24.1, which is reproduced below for the facility of reference:(b) Telcon is a Joint Venture of Hitachi and Tata Motors Limited (formerly known as Tata Engineering and Locomotive Company Limited and hereinafter referred to as "Tata Motors") and has been set up with the object of engaging in the manufacture, marketing and servicing of the Hitachi licence products and Telcon's products.1.13 "Technical Know-How" shall mean product information, drawings, manufacturing procedure and methods, technical documentation and other technical information owned by or available with or to Hitachi, relating but not limited to manufacture, quality standards, functional tests, inspection and servicing of Hitachi Licence Products and shall include all intellectual property in relation thereto.2.2 Subject o the terms and conditions of this agreement, Hitachi hereby grants to Teclcon, an exclusive but non-transferable licence, to manufacture and / or assemble the Hitachi Licence Products within the territory using technical know-how furnished by the Hitachi pursuant hereto and to sell or otherwise dispose of the Hitachi Licence Products, in the manner specified below.2.4 Hitachi License Products manufactured by Telcon shall be sold only under the trade name / brand name of "Tata-Hitachi" in India. Telcon shall not use "Hitachi" as part of the trade name /brand name outside India, except with the prior written consent of Hitachi. Telcon shall, if required, enter into separate trade mark license agreements for the use by Telcon of the "Hitachi" and "Tata" trade / brand name and trade marks, upon terms and conditions (including payments, if any) acceptable to the respective owners thereof.11.1 Telcon shall start commercial product of specific Hitachi licence products within an agreed time frame and in any event, subject to receipt by Telcon of the technical know-how within the time periods specified in Article 3.1 above, no later than three years from the Effective date.15.2 Royalty, as above, shall be applied to each new Hitachi licence products sold by Telcon, for either a period of seven (7) years from the date of commencement of commercial production of such product, or ten (10) years from the execution of this agreement, whichever is earlier (hereinafter referred to as 'the Royalty Period.")24.1 Unless terminated in the manner hereinafter provided, the term of this agreement for a Hitachi Licence Product, shall be the period commencing from the Effective date and ending on expiry of eleven years from the date of commencement of commercial production thereof. Accordingly, notwithstanding the expiry of the Royalty Period, Telcon shall be entitled to continue the manufacture and sale of the Hitachi License Products for the aforesaid term of this agreement.11. Thus, from perusal of the relevant clau

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ses of the agreement, it is clear that the assessee is a joint venture company and under the agreement has been granted non transferable licence to manufacture / assemble the Hitachi licence products within the territory using technical know-how furnished by Hitachi and to sell otherwise dispose of the Hitachi licence products. The products shall be sold only under the trade / brand name of Tata Hitachi. It is also pertinent to note that even expiry of the 11 years from the date of commercial production, the assessee is entitled to continue the manufacture and sale of Hitachi licence products for the aforesaid term of the agreement. Under the agreement, the assessee has incurred an expenditure which gives him enduring benefit, therefore, the same has to be treated as capital expenditure. The Assessing Officer as well as the tribunal rightly held that payment of royalty made by the assessee is a capital expenditure and is not a permissible deduction under Section 37(1) of the Act. The findings recorded by the tribunal in this regard are based on meticulous appreciation of evidence on record and by no stretch of imagination can said to be perverse.12. In view of preceding analysis, the substantial questions of law framed by a bench of this court are answered against the assessee and in favour of the revenue. In the result, the appeal fails and is hereby dismissed.
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