DCIT CORPORATE CIRCLE 2(2), CHENNAI vs. INDIAN ADDITIVES LTD., CHENNAI

आदेश / O R D E R

PER BENCH: These cross appeals filed by the assessee, as well as the

Revenue are directed against the separate, but identical orders

passed by the learned Commissioner of Income Tax (Appeals)-6,

:- 2 -: Chennai, dated 28.12.2017 and pertains to Assessment Years

(A.Ys) 2011-12, 2012-13, 2013-14 & 2014-15. Since, facts are

identical and issues are common, for the sake of convenience,

these cross appeals filed by the assessee as well the Revenue are

being heard together and are being disposed off, by this consolidated order.

cross appeals in their respective appeals filed for all A.Ys.

Therefore, for the sake of brevity, grounds of appeal filed by

the assessee in IT(TP)A No.9/Chny/2018 for A.Y 2011-12 and

grounds of appeal filed by the Revenue in ITA

No.1034/Chny/2018 for A.Y 2011-12 are reproduced as

under:

IT(TP)A No.9/Chny/2018 for A.Y 2011-12: “The order of the Hon'ble Commissioner of Income Tax (Appeal) is against facts and circumstances of the case. Both the CIT (A) and the Assessing Officer has failed to appreciate the various submissions made in the current perspective. 1. Download Adjustment of Rs.5,59,73,812/-: The Appellant has adopted different methods for each type of transactions and the same has been already produced before the TPO and Assessing Officer. However, TPO has ignored the method adopted by the Appellant and applied TNMM for the transaction as a whole. Even assuming but not admitting in the event of Lubrizol as comparison the following adjustments has to be granted. • Adjustments on account of Lube Oil / Base Oil/ Mineral Oil price • Tolling fee for Zinc • Freight cost on sales

:- 3 -: If the same is considered the Operating Profit/ Operating Income of IAL will be 23.57% as against Lubrizol ratio of 23.72% and the transaction will be at Arms Length Price. 2. Disallowance u/s.40a(ii) - Rs.1,08,43,349/-: The amount of royalty paid is revenue in nature as held by the Hon'ble Income Tax Appellate Tribunal ITA No.2138/ Mds/2008 & ITA No.700 to 702/ Mds/2009 dated 13.11.2009 in appellanť's own case for A.Yrs 1999-2000 to 2002-03. Therefore any tax paid towards royalty is also revenue in nature. 3. R& D Cess Rs.21,26,429/-: The Appellant has paid CESS towards Royalty at 5% and it is remitted to Reserve bank of India. The Appellant has claimed the same on payment basis under section 43B of the Income Tax Act, 1961. 4. Disallowance of depreciation for non-submission of supporting documents Rs.20,63,369/-: The Assessing Officer has not called for any specific invoices towards addition to Fixed Assets. However the Assessing Officer has disallowed the adhoc amount of 25% and the claim regarding additional depreciation. The CIT Appeals has not discussed the same in the order for which the Appellant has filed the Rectification Petition. However while passing the order the Assessment of depreciation has not been considered. For these and other grounds that may be urged at the time of hearing of the appeal, the appellant prays that the appeal be allowed. The appellant be permitted to submit additional grounds at the time of hearing.”

ITA No.1304/Chny/2018 for A.Y 2011-12: “1. The Order of the learned Commissioner of lncome Tax (Appeals) is contrary to the Law and facts of the case. 2.1 The CIT(A) erred 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 on the acquisition of the same. 2.2 The CIT(A) ought to have appreciated the fact that when the royalty falls under the definition of intangible assets as per the provisions of section 32(1)(0) of the Act and the said expenditure is to be treated only as capital expenditure. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the Order of the learned Commissioner of

:- 4 -: Income Tax (Appeals) be set aside and that of the Assessing Officer be restored.”

No.9/Chny/2018 for A.Y 2011-12 are that the assessee M/s.

Indian Additives Ltd. (IAL) is engaged in the business of

manufacturing and sale of lubricant oil additives for the

Indian market. IAL was formed as 60:40 joint venture

between Chevron Oronite Company LLC, UK (COCL) and

Chevron Oronite Japan Ltd. Japan (COJL). The assessee had

filed its return of income for A.Y 2011-12 to 2014-15

u/s.139(1) of the Income Tax Act, 1961 (hereinafter referred

as “the Act”). The case was selected for scrutiny and during

the course of assessment proceedings, a reference was made

to the Transfer Pricing Officer (TPO) to determine Arms

Length Price (ALP) of international transactions of the

assessee with its associated enterprises (AE) as reported in

Form-3CD, filed for the relevant assessment year. During the

course of transfer pricing proceedings, the TPO noticed that

the assessee had entered into various international

transactions including purchase of raw materials from their

AE Chevron Oronite Pvt. Ltd., Singapore etc. The assessee

:- 5 -: has followed CUP as a most appropriate method to

benchmark international transactions for purchase of raw-

materials. The assessee has taken external CUP and

benchmarked its transactions with AE in respect of purchase

of raw-materials and claimed that the transactions with its AE

are at ALP. The TPO has called information from M/s. Lubrizol

India Pvt. Ltd. which is also in the field of automobile

additives manufacturing. The assessee has also accepted said

company as comparable. From the information received, M/s.

Lubrizol India Pvt. Ltd. is having operating margin 23.73% as

against assessee’s operating margin of 16.01%. Therefore,

called upon assessee to explain as to why M/s. Lubrizol India

Pvt. Ltd. cannot be considered as comparable for the purpose

of CUP method. The assessee raised their objection for

comparing M/s. Lubrizol India Pvt. Ltd. as comparable on the

ground that M/s. Lubrizol India Pvt. Ltd. has a better

backward integration system, whereas the assessee company

does not possess the manufacturing facility for making zinc.

Further, the assessee has entered into subcontracting

agreement with United Prosperous Ltd. for making Zinc.

Therefore, the cost of zinc in the case of IAL and Lubrizol

:- 6 -: cannot be compared one to one and necessary adjustment

had to be made to reflect the correct cost, which IAL has

incurred on subcontracting the same on UPL. The assessee

had also sought for adjustment in respect of Lube oil/base

oil/mineral oil price on the ground that the cost of

procurement of lube oil or mineral oil which is one of the

major raw-material used in the additive package is higher in

the case of assessee when compared to the selected

company. The assessee had also sought adjustment towards

freight cost on sales on the ground that M/s. Lubrizol India

Pvt. Ltd. is having reduced cost of transportation, because of

plant situated across the countries, whereas the assessee is

not having advantage of plant across the countries.

Therefore, suitable adjustment needs to be given for cost of

freight on sales. The TPO after considering the relevant

submissions of the assessee and also taken note of his

predecessor TP order for earlier assessment years, observed

that similar claim made by the assessee in last year was not

entertained and the matter is pending before the Ld. CIT(A)

for adjudication. The scenario for the current year was also

not different. Therefore, rejected the arguments of the

:- 7 -: assessee for economic adjustments and computed downward

adjustment by considering Lubrizol India Pvt. Ltd. operating

margin to the margin of the assessee and made TP

adjustment of Rs. 27,35,30,000/-.

passed draft assessment order u/s. 143(3) r.w.s 144C(1) of

the Act on 16.03.2015 and proposed TP adjustment as

suggested by the TPO. The assessee vide letter dated

15.04.2015 informed the A.O that the assessee wish to prefer

an appeal before the Ld. CIT(A) against the draft assessment

order. Therefore, requested the A.O to pass final assessment

order. Thereafter, the A.O passed final assessment order u/s.

143(3) r.w.s. 144C(13) of the Act, and made additions

towards TP adjustment as suggested by the TPO. The A.O

had also made additions towards disallowance u/s. 40(a)(ii)

of the Act towards TDS on royalty, on the ground that the

TDS is not deductible u/s. 40(a)(ii) of the Act. The A.O had

also made additions towards disallowance of R&D Cess u/s.

43B of the Act. Similarly, the A.O had made additions

towards disallowance of depreciation for non submission of

:- 8 -: supporting documents and has also made additions towards

interest on unsecured loan.

preferred an appeal before the Ld. CIT(A). Before the Ld.

CIT(A), the assessee challenged additions made by the A.O

towards downward adjustment on international transactions

of the assessee with its AE, royalty payment made to M/s.

Chevron Oronite Company LLC, USA, Disallowance of TDS

u/s. 40(a)(ii) of the Act, disallowance of R & D cess,

disallowance of depreciation for non submission of supporting

documents and addition towards interest on unsecured loans.

The Ld. CIT(A), for the reasos stated in their appellate order

dated 28.12.2017, partly allowed the appeal filed by the

assessee, wherein he has deleted additions made by the A.O

towards disallowance of royalty on the ground that royalty

paid by the assessee to its AE is revenue in nature. However,

confirmed additions made by the A.O towards TP adjustment

on international transactions, disallowance of TDS u/s.

40(a)(ii) of the Act, disallowance of R&D cess and

disallowance of depreciation. Aggrieved by the Ld. CIT(A)

:- 9 -: order, the assessee as well as the Revenue are in appeal

before us.

assessee’s appeal for A.Ys 2011-12 to 2013-14 is downward

adjustment towards purchase of raw-materials from its AE.

The Ld. counsel for the assessee, submitted that this issue is

covered in favour of the assessee by the decision of ITAT, ‘D’

Bench, Chennai in assessee’s own case for A.Y 2009-10 in

ITA No.2579/Mds/2016, where an identical issue had been

considered by the Tribunal, in light of relevant facts and in

respect of cost of Lubrizol and mineral oil adjustment and set

aside the matter to the A.O for fresh adjudication to provide

adjustment towards cost of Lubrizol oil and tolling fee for

Zinc. In respect of adjustment towards transportation cost,

the Tribunal has confirmed the findings of the A.O and Ld.

CIT(A). Therefore, a similar directions may be given for

these A.Ys to give suitable adjustment towards tolling fee for

zinc and Lubrizol oil.

order of Ld. CIT(A) submitted that the assessee could not

:- 10 -: provide any evidences as to why necessary adjustment is

required to be given in respect of price of Lubrizol oil and

tolling fee for zinc. The assessee is also unable to provide

necessary details why adjustment is required to be provided

for cost of freight on sales. However, he fairly agreed that in

the earlier years, Tribunal has set aside the issue to the file of

A.O and TPO for fresh consideration and thus, the matter

may be decided in accordance with law.

available on record and gone through orders of the

authorities below. We find that an identical issue has been

considered by the Tribunal in assessee’s own case for A.Y

2009-10 in ITA No.2579/Mds/2016, where the Tribunal after

considering relevant facts has set aside the issue to the file of

the A.O for reconsideration and give proper adjustment on

account of raw-material cost of Lubrizol and mineral oil and

also regarding tolling fee for zinc. The relevant findings of

the Tribunal order are as under:

“6. We have heard both the parties and perused the material on record. According to ld.A.R, Lubrizol is procuring raw materials at lower cost as Lubrizol is a JV promoted by M/s. Indian Oil Corporation ( I0CL)., and M/s.Chevron Oronite Company LLC USA. IOCL has given better discount in Lube Oil price/MT to

:- 11 -: Lubrizol, which is not available to the assessee. In our opinion, if it is reflected in the financial statement of Lubrizol, it is appropriate to give credit to the same and computation of T.P adjustments thereafter while determining the ALP. Accordingly we remit the issue to the file of AO for reconsideration and give proper adjustments on account of raw materials cost of Lubrizol and mineral oil. This issue is remitted to the file of AO for fresh consideration. 6.1 Regarding Tolling fee for ZINC, it was submitted that Lubrizol toll had their own Zinc and on other hand, the assessee entered into sub contract agreement with UPL Ltd. in Gujarat for making Zinc. Therefore the cost of Zinc in the case of assessee is higher compared to the cost incurred by the Lubrizol towards the Zinc. In our opinion, if the details of cost of procurement of Zinc by tolling, the same by Lubrizol is available and if the AO finds that the cost price of the Zinc incurred by the Lubrizol is lesser as compared to the assessee's case, then the suitable adjustments to be made while determining the ALP. Accordingly, this issue is also remitted to the file of AO for fresh consideration. It is needless to say that opportunity of hearing to be given to assessee by AO/TPO before deciding the above issues. 6.2 Regarding transportation cost, it is submitted that the assessee incurred additional cost for transportation from Gujarat to Chennai whereas the cost of transportation in case of Lubrizol is less. However, we find that the assessee has not able to establish that the cost of transportation in case of Lubrizol is lesser than the assessee and Lubrizol is selling its goods only in local and thus arguments of assessee cannot be upheld. This ground is rejected.”

Co-ordinate Bench of ITAT in assessee’s own case for earlier

year, we remit the issue of downward adjustment towards

purchase of raw-materials to the file of the TPO/A.O to give

suitable adjustment in respect raw-material cost of Lubrizol

and mineral oil and also tolling fee for zinc. Thus, we set

aside the issue to the file of the A.O to re-consider the issue

in light of directions given by the Tribunal for A.Y 2009-10

:- 12 -: and decide the issue for these assessment years 2011-12,

2012-13 & 2013-14 also.

assessee appeal for A.Ys 2011-12 & 2012-13 is disallowance

of TDS on running royalty u/s. 40(a)(ii) of the Act. The A.O

has disallowed a sum of Rs. 1,08,43,349/- for A.Y 2011-12

towards income tax paid on royalty payment made to AE on

the ground that, as per the provisions of Section 40(a)(ii) of

the Act any sum on account of any rate or tax levied on the

profits and gains of any business or profession or assessed at

a proportion of, or otherwise should not be allowed as

expenditure. It was the argument of the assessee before the

A.O that, out of sum of Rs. 1,08,43,349/- a sum of Rs.

75,05,019/- is on account of TDS on royalty paid to AE and

said TDS has been incurred by the assessee as per terms of

agreement with its AE. Therefore, when royalty has been

treated as an expenditure, consequent TDS liability incurred

by the assessee for grossing up purpose also needs to be

allowed as an expenditure.

:- 13 -: 11. The Ld. counsel for the assessee submitted that, as per

the agreement with its AE, the royalty payment to M/s.

Chevron Oronite Company LLC, USA is net on all taxes.

Therefore, while making payment of royalty, the assessee has

grossed up TDS deductible on said royalty and paid royalty

net of taxes to the AE and remitted TDS portion to the Govt.

account. Since, royalty paid to AE has been held to be

revenue in nature and allowable as expenditure, consequent

TDS paid on said royalty is also in the nature of expenditure,

which needs to be allowed as deduction. The A.O without

understanding relevant facts simply disallowed TDS deducted

on royalty paid and debited to rates and taxes account u/s.

40(a)(ii) of the Act. In this regard, the Ld. counsel for the

assessee has filed copy of agreement between appellant and

Chevron Oronite Company LLC, USA to prove their claim that

TDS liability on royalty is borne by the assessee.

Ld. CIT(A) submitted that the assessee could not explain how

TDS on royalty is an allowable expenditure. Further, as per

the provisions of Section 40(a)(ii) of the Act, any tax on profit

:- 14 -: is not allowable as deduction. Further, the assessee could not

file copy of agreement with its AE to prove that TDS on

royalty is borne by the assessee. Therefore, the A.O has

rightly disallowed TDS u/s. 40(a)(ii) of the Act and therefore,

their order should be upheld.

available on record and gone through orders of the authorities

below. The assessee has debited TDS deducted on royalty

payment made to its AE M/s. Chevron Oronite Company LLC,

USA. The A.O has disallowed royalty payment as capital in

nature and consequently disallowed TDS deducted on said

royalty and debited to profit and loss account under the head

rates and taxes as not allowable deduction u/s 40(a)(ii) of the

Act. The assessee claims that royalty paid to AE has been

held to be revenue in nature by the decision of ITAT in earlier

years and the Ld. CIT(A) by following the decision of ITAT has

deleted additions made by the A.O towards disallowance of

royalty expenses and Revenue is in appeal before the

Tribunal. We find that the Tribunal in earlier years

considered the nature of royalty paid by the assessee in light

:- 15 -: of agreement between the parties and after considering the

relevant facts held that royalty paid to M/s. Chevron Oronite

Company LLC, USA is revenue in nature and allowable as

deduction. Since, royalty expenditure has been considered to

be revenue in nature, consequent grossing up of expenditure

towards TDS deductible on said royalty is also revenue in

nature and said expenditure is deductible u/s. 37(1) of the

Act. We further noted that as per clause (4)(i)(c) of

agreement between assessee and its AE dated 31.03.2009,

the royalty payment to AE is net of applicable Indian income

tax (which shall be borne by Indian Additives Ltd.). From the

above, it is very clear that the assessee needs to make

payment of royalty, net applicable taxes and thereby liability

towards TDS is borne by the assessee. Since, the royalty

expenditure is considered as revenue in nature, consequent

TDS on said royalty is also revenue in nature which needs to

be allowed as deduction. Therefore, we are of the considered

opinion that the A.O is erred in disallowing TDS on royalty

u/s. 40(a)(ii) of the Act because, it is neither a tax nor duty

levied on profits of the assessee, but it is an expenditure

incurred by the assessee for payment of royalty to its AE.

:- 16 -: Therefore, we direct the A.O to delete the additions made

towards disallowance of royalty u/s. 40(a)(ii) of the Act for

A.Ys 2011-12 & 2012-13.

assessee appeal for A.Ys 2011-12 & 2012-13 is disallowance

on R&D cess paid to RBI. The assessee has paid 5% cess on

total royalty paid to its AE and remitted the same to RBI.

The A.O has disallowed R&D cess on the ground that royalty

expenditure is capital in nature and not revenue and

consequently cess paid on said royalty expenditure and

remitted to RBI cannot be allowed as a deduction.

available on record and gone through orders of the

authorities below. We find that the Tribunal in assessee’s own

case for earlier years, held that royalty payment made to its

AE M/s. Chevron Oronite Company LLC, USA is revenue in

nature which is allowable as expenditure. Since, royalty

expenditure is considered to be revenue in nature, cess paid

on royalty expenditure and remitted to RBI is also revenue in

nature, which needs to be allowed as expenditure. Therefore,

:- 17 -: we direct the A.O to delete disallowance of R&D cess for the

A.Ys. 2011-12 & 2012-13.

assessee appeal for A.Ys 2011-12 is disallowance of

depreciation for non submission of supporting documents.

During the course of assessment proceedings, the assessee

was asked to submit the invoices/bills for the additions to

fixed assets. Since, the assessee could not file necessary

bills/invoices in support of additions to fixed assets, the A.O

has disallowed 25% of the claim of the assessee regarding

the additional depreciation on fixed assets and disallowed a

sum of Rs. 20,63,369/- and added back to total income.

available on record and gone through orders of the

authorities below. The assessee neither furnished necessary

bills and invoices in respect of additions to fixed assets nor

justified the rate of additional depreciation. Even before us,

the assessee could not file any details, including bills and

invoices for addition to fixed assets. In the absence of

necessary bills and invoices, the claim of additional

:- 18 -: deprecation cannot be allowed. Therefore, we are inclined to

uphold the findings of A.O and Ld. CIT(A) and reject the claim

of the assessee.

assessee appeal for A.Y 2012-13 is interest on unsecured

loan. During the course of assessment proceedings, the A.O

noticed that the assessee had claimed an amount of Rs.

33.83 Lakhs, towards interest on shortfall of advance tax

under the head ‘Finance Cost’ in the profit and loss account.

However, in the computation, the assessee has added back a

sum of Rs. 30.82 Lakhs, but not entire amount. On being

questioned, the assessee stated that shortfall for advance tax

is only Rs. 30.82 Lacs and the remaining balance of Rs. 3.1

Lakh pertains to interest on unsecured loan paid to HDFC

Bank. However, the assessee has not filed any details.

Therefore, the A.O has disallowed interest on unsecured loan

amounting to Rs. 3.1 Lakh and added back to total income.

available on record and gone through orders of the

authorities below. We find that the assessee has claimed

:- 19 -: interest paid on unsecured loan borrowed from HDFC Bank,

but could not file any necessary evidences including relevant

bank statements and loan sanctioned letter to prove interest

on unsecured loan debited into the profit and loss account.

Therefore, we are of the considered view that there is no

error in the reasons given by the Ld. CIT(A) to sustain

additions made towards disallowance of interest on unsecured

loan and thus, we are inclined to uphold the findings of Ld.

CIT(A) and reject the ground taken by the assessee.

assessee appeal for A.Ys 2011-12 to 2014-15 is additions

made towards disallowance of royalty payment to M/s.

Chevron Oronite Company LLC, USA. The A.O has disallowed

royalty paid to M/s. Chevron Oronite Company LLC, USA, AE

of the assessee on the ground that royalty payment is capital

in nature which gives enduring benefit to the assessee and

thus, cannot be allowed as deduction.

issue is covered in favour of the assessee by the decision of

:- 20 -: ITAT, ‘A’ Bench, Chennai in assessee’s own case for A.Y

2010-11 in ITA No.835/Mds/2016, where the Tribunal after

considering the relevant agreement between the assessee

and its AE held that royalty payment to its AE is revenue

expenditure which does not give any enduring benefit to the

assessee, therefore, allowable as deduction u/s. 37(1) of the

Act.

issue is covered in favour of the assessee in assessee’s own

case for A.Y 2010-11 in ITA No.835/Mds/2016.

available on record and gone through orders of the

authorities below. We find that the Co-ordinate Bench of

ITAT, Chennai in assessee’s own case has considered an

identical issue in light of agreement between the assessee

and M/s. Chevron Oronite Company LLC, USA and after

considering the relevant facts held that royalty payment by

the assessee to its AE has no nexus or direct connection with

the manufacture of the product and thus in this

circumstances, it should only be a revenue expenditure paid

:- 21 -: for the use of the license, trade mark and technical

information for a particular period and accordingly, allowable

as a revenue expenditure. The relevant findings of the

Tribunal order are as under:

"7. We heard the rival submissions, perused the material on record and judicial decisions relied. The sole crux of the issue being payment of royalty to M/s.Chevron Oronite Company, LLC, USA is a Revenue expenditure or capital expenditure eligible for depreciation @ 25%. We perused the assessment order and found that Ld.Assessing Officer has elaborately discussed on the agreement and treated the said payment in the nature of intangible assets and allowed depreciation. The Id. Commissioner of Income Tax (Appeals) relied on the order of the Co-ordinate Bench of this Tribunal in assessee's own case and allowed the appeal. The only contention of the Department before the Tribunal that the Revenue has not accepted the order of the Tribunal and an appeal has already been fled in Hon'ble High court of Madras and the same is pending. This Tribunal is of the considered opinion that mere pendency of appeal before Hon'ble High Court cannot be a reason to take a different view. So, considering the decision of Co-ordinate Bench of the Tribunal in assessee own case in ITA No.1437, 1438 & 1439/Mds/2012, assessment years 2003-04, 2005-06 & 2006-07 observed at para 4 at page 2 of his order as under: 4. We have perused the orders and heard the rival submissions. We find that a similar issue had come up before this Tribunal in Revenue's appeal for assessment years 1999-2000 to 2002-03 as also in assessment year 2004-05. In its order dated 17" June, 2011 for assessment year 2004-05 in ITA No.951/Mds/2009, it was held by co-ordinate bench of this Tribunal as under: "7. We have perused the orders and heard the rival contentions. We find that the same issue regarding royalty payment made to M/s.COCL was considered by this Tribunal in the orders referred supra. t was held by this Tribunal at para 2.17 of its order dated 13th November, 2009, as under: "2.17 In the facts and circumstances of the case, when the royalty payments shall be computed at a particular percentage of sales priced, and if there was no sales, no royalty would be payable. Merely because goods were produced in India by the assessee acquiring the technical process from the foreign collaborator, it cannot be said that the royalty payment is referable to the production house/manufacturing of the products. The technical know-how for the manufacturing

:- 22 -: process was acquired by the assessee against a lump Sum payment or royalty and subsequent to that, if there is no sale of the product manufactured by the assessee, then there would be no royalty payable. Thus, the running royalty payable has no nexus or direct connection with the manufacture of the product. The liability to pay the royalty arises only when there is a sale. Therefore, we are of the view that the runnincy royalty cannot be said to be a capital expenditure. We do not find any rationale in bifurcation of the running royalty and treating one part as capital and the other part as revenue by the learned Commissioner of Income Tax (Appeals) without any basis. The decision relied upon by the learned Commissioner of Income Tax (Appeals) is on the facts that the assessee could continue to use the technology even after the expiry of the period of payment of royalty. Therefore, when the lump sum royalty was separately agreed and paid, then the running royalty, in the facts and circumstances, would only be a revenue expenditure paid for the use of the license, trade mark and technical information for a particular period. Accordingly, this issue is decided in favour of the assessee and against the Revenue". 8. Respectfully following the order of this Tribunal for the earlier assessment years, claim of the assessee has to be allowed for the impugned assessment year as well. Hence, appeal of the assessee for assessment year 2004-05 stands allowed, whereas, the related ground of the Revenue stands dismissed". 5. Thus, this Tribunal had followed its own order for earlier assessment years on the same issue. We are, therefore, of the opinion that CIT(Appeals) was well justified 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" We, respectfully following the Co-ordinate Bench decision, upheld the order of Commissioner of Income Tax (Appeals) and dismiss the ground of the Revenue." Respectfully following Jurisdictional ITAT's decision in appellant's own case, on this recurring issue, I direct the AO to delete the addition made on account of royalty payment pertaining to all the four assessment years under appeal. The grounds of appeal taken by the appellant on this issue are allowed.”

decision of Co-ordinate Bench of ITAT in assessee’s own case

for A.Y 2010-11, we are of the considered view that there is

:- 23 -: no error in the order of Ld. CIT(A) to delete the additions

made towards royalty and thus, we are inclined to uphold the

findings of Ld. CIT(A) and dismiss the appeal filed by the

Revenue for A.Y 2011-12 to 2014-15.

2011-12, 2012-13 and 2013-14 are partly allowed and

appeals filed by the Revenue for A.Ys. 2011-12 to 2013-14

are dismissed.

Order pronounced on 19th May, 2023.

Sd/- Sd/- (मंजुनाथ. जी) (मनोमोहन दास) (Manjunatha. G) (Manomohan Das) �ाियक सद�/Judicial Member लेखा लेखा सद�य लेखा लेखा सद�य /Accountant Member सद�य सद�य चे�ई/Chennai, �दनांक/Dated: 19th May, 2023. EDN/-

आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ+/Appellant 2. -.थ+/Respondent 3. आयकर आयु//CIT 4. िवभागीय -ितिनिध/DR 5. गाड) फाईल/GF