THE PR. COMMISSIONER OF INCOME TAX-4 vs. M/S HERO MOTOCORP LTD.

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ITA/915/2017HC DelhiDLHC01325256201731 October 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the first two questions concerning royalty, technical guidance fee, and model fee were no longer res integra, being covered by the Court's earlier decision in CIT v. Hero Honda Motors Ltd., 372 ITR 481. The third question regarding export commission was also decided by a Division Bench of the Court in ITA No. 923/2015, decided on 08.05.2017. For the fourth issue of additional depreciation, the ITAT had decided the assessee's case for another year, and that decision had become final. Consequently, the Court was of the opinion that no substantial question of law arose from the ITAT's order. The appeal was therefore dismissed. No specific issue was left undecided.

What were the facts?

The Revenue, represented by the Pr. Commissioner of Income Tax-4, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT). The appeal concerns assessment year(s) not specified in the judgment. The disputed amounts are not explicitly stated. The appeal raises four questions of law. The first two questions relate to royalty, technical guidance fee, and model fee. The third question concerns the treatment of export commission. The fourth question pertains to the allowance of additional depreciation. The ITAT had previously decided the assessee's case for another year regarding additional depreciation, and that decision had become final.

What were the issues?

The Tribunal had to decide four questions of law raised by the Revenue: 1. Whether the royalty, technical guidance fee, and model fee are to be treated as deductible expenses or as payments subject to withholding tax under Section 195 of the Income Tax Act, 1961. 2. Whether the ITAT erred in its treatment of these fees. 3. Whether the ITAT correctly decided the issue of export commission. 4. Whether the ITAT erred in allowing additional depreciation. Contentions: Assessee: The assessee's contentions are not explicitly recorded, but the judgment implies that the issues concerning royalty, technical guidance fee, model fee, and export commission were covered by previous decisions of the High Court. For additional depreciation, the assessee's case for another year had already been decided by the ITAT and had become final. Revenue: The Revenue urged four questions of law in its appeal.

Which sections of the Income-tax Act were involved?

Section 260A,Section 195

AI-generated summary — verify with the full judgment below

$~16 * IN THE HIGH COURT OF DELHI AT NEW DELHI +

ITA 915/2017

THE PR. COMMISSIONER OF INCOME TAX-4 ..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

M/S HERO MOTOCORP LTD.

..... Respondent Through: Ms. Kavita Jha with Ms. Shivani Khandekar, Advocates.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SANJEEV SACHDEVA

O R D E R %

31.10.2017

Four questions have been urged by the Revenue in this appeal filed under Section 260A of the Income Tax Act, 1978. First and second pertain to royalty and technical guidance fee as well as model fee. The question is no longer res integra. It is covered by the decision of this Court in CIT v. Hero Honda Motors Ltd. 372 ITR 481.

The third question relates to treatment of export commission which was decided recently by the Division Bench in ITA No.923/2015, decided on 08.05.2017.

The last issue pertains to allowance of additional depreciation. The ITAT, we notice, has decided the assessee’s case for another year; that decision has become final.

Having regard to the above position, the Court is of the opinion that no substantial question of law arises; the appeal is, therefore, dismissed.

S. RAVINDRA BHAT, J

OCTOBER 31, 2017/vikas/ SANJEEV SACHDEVA, J

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