Appeal challenging the classification of royalty payments as revenue expenditure. Court disposed of the appeal because the respondent invoked the Direct Tax Vivad Se Vishwas Act, 2020 during pendency, rendering the matter settled.
Appeal disposed as nothing survives for adjudication following settlement under Direct Tax Vivad Se Vishwas Act.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 09.02.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND
THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD
Tax Case Appeal No.893 of 2016
Principal Commissioner of Income Tax 2 No.121, Mahatma Gandhi Road, Chennai 600 034.
... Appellant Vs.
M/s. Indian Additives Ltd, Express Highway, Manali, Chennai - 600 068. PAN: AAA CI 1445 G
... Respondent
Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, “A” Bench, Chennai dated 14.06.2016 passed in I.T.A.No.835/Mds/2016 preferred against the order passed by the Commissioner of Income Tax (Appeals)-6, Chennai-34, dated 27.01.2016 made in ITA No.155/CIT(A)-6/2014-15 against the order passed by the Deputy Commissioner of Income Tax Company Circle II(3), Chennai, dated 29.04.2014 for the Assessment Year 2010-13 in PAN/GIK No.AAACI1445G.
This Tax Case Appeal has been filed by the appellant / Revenue challenging the order dated 14.06.2016 passed by the Income Tax Appellate Tribunal, Bench 'A', Chennai in I.T.A.No.835/Mds/2016,relating to the assessment year 2010-11.
“1. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in treating the royalty payments made to M/s.Chevron Oronite Company LLC USA as nothing but revenue expenditure not resulting in any acquisition of intangible assets when the assessee is enjoying enduring benefit by infusion of new technology?
3.When the matter was taken up for consideration, the learned counsel appearing for the respondent / assessee submitted that during the pendency of this tax case appeal, the assessee has availed the benefit conferred under the Direct Tax Vivad Se Vishwas Act, 2020 and filed necessary declarations, which were accepted and Form 5 / order for full and final settlement of tax arrears, was also issued by the Income tax department, on 07.05.2021. The learned counsel has also filed a memo dated 08.02.2022 to that effect.
4.The aforesaid submission made by the learned counsel for the respondent/assessee has also been fairly conceded by the learned senior standing counsel appearing for the appellant/ Revenue.
5.In view of the subsequent development, this court is of the opinion that nothing survives for adjudication in this appeal. Recording the submission so made by the learned counsel on either side, the Tax Case Appeal stands disposed of. No costs.
Sd/-
Deputy Registrar(CS)
//True Copy//
Sub Assistant Registrar
av
To
Tax Case Appeal No.893 of 2016
KSM(CO) SU(18/02/2022)
2 issues framed by the court
Whether royalty payments made to a foreign company should be treated as revenue expenditure or capital acquisition of intangible assets.
Whether the Tribunal correctly classified royalty payments under intangible assets provisions.
3 provisions across 2 enactments
Principal Commissioner of Income Tax 2
M/s. Indian Additives Ltd
R. MAHADEVAN
J. SATHYA NARAYANA PRASAD
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
